§ The President of the Board of Trade (Mr. Dalton)
On the last occasion when we had a general discussion on the affairs of the Board of Trade on a Supply Day, now more than two years ago, at the time of Dunkirk, the discussion principally turned upon the question of export trade. Since that time there has been a great change in the relative balance of importance of the matters dealt with by the Board of Trade. Exports no longer hold a predominant place relatively to the problems of the Home front which they held then. This is due partly to the fact that, owing to the very generous Lease-Lend policy of our American friends and Allies, exports are no longer so immediately necessary to pay for imports as they were when my predecessor last addressed the Committee on the subject, and, in the second place, it has become necessary that we should reserve for the urgent needs of our own people certain supplies which otherwise, in the ordinary course of trade, we should export. On the other hand, we 209 have by no means forgotten the vital importance of the export trade in the postwar world. We have had for the time being to reduce exports very severely. We still export on a certain scale to meet the urgent requirements of our friends, and some neutral countries, from whom we get important imports in return. But in the post-war world the importance of the export trade will evidently again become paramount, and plans are even now being closely studied in the Board of Trade, and in consultation with other Departments and persons in industry and trade who are concerned in the matter, so that we may start a new export drive immediately conditions permit it.
To-day I do not propose to cover a very wide field of subjects. I propose to speak, as I understand is the general desire, first of all upon the policy of industrial concentration and utility production which is now being pursued and then to deal, I am afraid at some length, with the questions of retail trade, with special reference to the recent Report of the Retail Trade Committee. I shall refer to policies initiated by my two predecessors, who are now respectively Minister of Production and Minister of Supply. I hope and believe that the Board of Trade has played, and is continuing to play, an important part in mobilising effectively the home front for war purposes, and, in so far as that is so, a large part of the credit is due to the energy, determination and drive imparted by my two right hon. Friends who preceded me in this office to the work of the Department. There is continuity of policy in many matters initiated by them and being further pursued now by me, including the concentration of industry, various measures for the control of supplies, clothes rationing and various other policies. I should also like to thank and to pay my tribute to the constant cooperation which I and my predecessors have had from various elements with whom we naturally have to do much co-operative work, the representatives of various sections of trade and industry, who have taken extremely well on the whole and in a very fine spirit indeed various most disagreeable Regulations which we have had from time to time to impose in the interests of the war effort. Those measures have sometimes involved the complete extinction, at any rate for the period of the war, of particular businesses or sections of industry, and they have 210 been taken exceedingly well. I should like also to thank representatives of the trade unions concerned in the various branches of our work, and of the T.U.C., for their most valuable help in many directions, and not least in that most ticklish job, the allocation of supplementary coupons under the clothes rationing scheme.
I should like to run over the various stages of control of supplies which have been operated by the Board of Trade and to show that this is a continuous policy pursued from the outbreak of the war till now, though varied according to the changing conditions which we have undergone. At the very beginning of the war restrictions were imposed on production for civilian needs. This was done generally through control of raw materials, and that is a matter which falls largely not under the Board of Trade at all but under the Minister of Supply, who exercises the main raw materials control, although my right hon. Friend and I are constantly in consultation on matters arising from that. In April, 1940, we followed up these restrictions by the first so-called Limitation of Supplies Orders. These limited the quantity of goods which any manufacturer or wholesaler might sell in the home market in relation to his pre-war sales. The original intention of these Orders was to promote the export drive and to deflect supplies from the home market, which was then relatively well supplied, to the export market. Later these Orders have been used for a rather different purpose, namely, to deflect resources in labour, materials and space from provision for the civilian population at home to the direct war effort. The Limitation of Supplies Orders have been enforced in terms of percentages which have gradually been increased. They began in the first half of 1940 with a cut of 33⅓, and have later been increased to 50, 75 and in some cases higher percentages. The number of people working for the home market in the trades covered by these Orders fell by more than 50 per cent., as we desired it to do, between June, 1940, and February, 1942. I have mentioned this in order to show why the policy of concentration of industry was decided upon.
When these limitations were imposed upon the sales which individual manufacturers might make it was evident that many industries would be working very much below capacity. There would be 211 machinery, factory space and administrative and operative staffs not fully used, and that would have led to an increase in overhead costs and a rise in the costs of production as well as a waste of space and labour. For that reason the present Minister of Production, when he was President of the Board of Trade, decided, in March, 1941, on the policy of the concentration of industry. The idea was to concentrate production in a certain number of so-called nucleus firms which would work at full capacity and, therefore, with minimum costs of production. Factory space and equipment in other forms would be released for direct war use and in some cases factory, space for the storage of war supplies. When industrial concentration was first decided upon it was the desire of the Government, which has been carried out, that as far as possible, concentration should be based on voluntary agreement between individual firms and not enforced from Whitehall. The nucleus firms were to make their own financial arrangement with those whose output they took over, and they would also take over from those firms the liability for export, Government contracts, and so on.
One of the most valuable aspects of the concentration policy, as it has worked up to date, is that it has enabled the Board of Trade to assist the Minister of Labour to arrange for the withdrawal of labour from various industries in those areas and at those times which were most appropriate not only for maintaining civilian production but for expanding war production. Looking back over the period during which we have had experience, of this concentration policy, I want to say two things. First, it has undoubtedly promoted industrial efficiency. I wish to add that this policy is a war-time policy and does not prejudge the post-war situation of particular firms. It will enable the firms that have temporarily ceased production to restart under more favourable conditions after the war than if concentration had not been pursued. Second, concentration of industry has been a difficult policy, but it has been carried through with a smoothness and speed far greater than was originally anticipated when it was introduced. There has been the closest co-operation throughout between the Board of Trade, the manufacturers and the trade unions concerned.
212 The policy has been applied in a flexible way, and there has been no attempt to apply a rigid or uniform scheme of concentration in different industries. To a large extent each concentration scheme has been worked out and operated by the industry itself. I have had the most valuable assistance, for which I am much indebted, from Sir Samuel Beale and other members of the Industrial and Export Council of the Board of Trade. They have been helpful in working out, in consultation with the industries and other interests concerned, these particular schemes. In the 14 months since the policy of concentration was initiated, close on 250,000 workers have been released as a result of it for other war work and more than 55,000,000 square feet of factory space have been liberated for other uses. Nor have we reached the end of the process. There are at the moment certain concentration schemes actually proceeding. There will also be cases where a reconcentration will be necessary—the concentration for the second time owing to the shrinkage of materials or a greater need of labour for war purposes than was previously anticipated.
I would like to say a word about one branch of war production which is growing in importance, to which, as President of the Board of Trade, I attach great importance, and which I desire to see developed so far as is reasonably possible. That is utility production. This originated with clothing. Shortly after my right hon. Friend who is now Minister of Production introduced the clothes rationing scheme it was felt that it should be supplemented by the production of utility clothing, the original idea being, on the one hand, to check the rise in clothing, prices which was then taking place and giving much concern to the public and to the Government, and especially to the Chancellor of the Exchequer, since it was causing a rise in the cost of living; and, on the other hand, to provide good and durable clothing with all reasonable economy of material and labour. Utility clothing, as I think is now generally recognised, does not mean uniform, rigid standardisation. The utility specifications leave a wide scope to manufacturers for variety, style and ingenuity. Utility clothes have on the whole been very well received especially by women. A lady 213 Member told me yesterday that she was wearing a utility frock and liked it very well.
§ Mr. Dalton
No, because I am saving my coupons. It is not one's duty to expend coupons rapidly but to expend them as slowly as possible having regard to the stock of clothes one possesses. This suit was made in 1930. It is generally too thin to be worn in the British climate. On the whole, utility clothes have been well received, and quite rightly. They will become relatively cheaper when the Purchase Tax has been removed, as was arranged in the last Finance Act. That will take effect next month. Utility clothing now amounts to about 70 or 80 per cent. of the total civilian production. When I came to the Board of Trade I at once began to study this question, and I said that my aim was to raise utility production to 100 per cent. That caused some concern in some quarters. I went on to say in the same speech that I was told there were serious technical difficulties in the way of doing that, and that I was going to look into them. I wish to reassure, those who were greatly disturbed by that statement by telling them frankly that there are serious difficulties in the way of raising it to 100 per cent., difficulties which arise from the very heterogenous character of our materials on the one hand and of the method of manufacture on the other. Therefore, I can give some measure of reassurance to those who were disturbed by my original statement when I say that the making of utility clothing up to the 100 per cent. will not, in fact, be achieved in the near future. I make that statement after having gone into the matter with care. Utility footwear is coming along very well and is much praised by those who have seen it and worn it, but it is not yet in the shops in substantial quantities, although I hope that it will be in a few months' time.
One word on the organisation of the clothing industry. Last autumn, in order to maintain civilian supplies of clothes, we had to take certain immediate steps. Labour was drifting away from the industry and in other directions was being withdrawn. In view of the size and variety of the clothing industry, which contains 214 no fewer than 25,000 firms, although many of them are very small, rapid concentration was impossible, and we therefore decided, as a first step, to designate a number of firms which were making utility clothing for civilians and Service clothing for the Forces. We gave them protection for all their labour outside certain age-groups, and we directed supplies of utility cloths to these designated firms. A list of them was published last month, and they number some 2,000. Those 2,000 firms were designated because they can furnish a large proportion of the essential clothing, both Service and civilian. Those designated firms are furnishing something like 80 per cent. of the utility clothing and about 70 per cent. of all made-up civilian clothing, but I wish at once to say that we have to continue to rely even now—I will speak about the future in a moment—for part of our supplies—the remainder apart from what I have indicated—upon undesignated firms. So far as designated firms are concerned, the Ministry of Labour may desire to call up or withdraw some of their younger labour, and also it may be necessary to take some of their factory space for other war purposes. Therefore, the remainder of the trade, the hitherto undesignated firms, still have in the aggregate a very considerable importance. It has in these circumstances been decided to give the whole of the clothing industry an opportunity to make voluntary plans for concentration, and the details are now under discussion with representatives of the trade. The concentration will proceed by regions, and the designated firms will be regarded as the natural nucleus firms for concentration, the natural but not the inevitable. Undesignated firms may also qualify to be nucleus firms. The first region in which we are tackling the concentration problem will be the Leeds district, which of course has great importance from the point of view of production.
§ Mr. Dalton
The 25,000 is the total; it includes them all. I want to emphasise that discussions upon concentration are in an early stage, and I do not want to prejudge them, but we are considering whether we can get a concentration arrangement satisfactory to all the different sections concerned as a follow 215 through behind the original step of designating this group of 2,000 firms.
I have looked for a definition which brings out one or two points in utility production. Utility products are intended to be goods sufficiently clearly defined for their prices to be fixed—that is important; planned to meet essential needs in a sensible manner; and produced in the most economical way possible in terms of material and labour. I emphasise that utility goods must be clearly defined so that their prices can be fixed. I am not going to speak at length on the regulation of prices under the two Acts which govern the matter, but one of the reasons for the promotion of utility production is that it does facilitate price control and the prevention of excessive charges. So long as there is miscellaneous and varied production it is impossible clearly to define the articles produced in such a way that you can fix the prices and enforce the fixed prices. It is only if you have a relatively limited range of clearly defined articles made according to specifications that you can fix prices, and I am very anxious that price regulation should be fair and effective. The other point of utility production is to get the greatest output from the limited resources now available and so keep the costs of production at the minimum. This means in many cases simplification of designs and the giving of large orders for a small range of goods rather than small orders for a large variety of goods.
I will at this point merely enumerate briefly the other branches of industry in which utility production has either already begun to take effect or is planned to take effect at an early date. Pottery: Here we are limiting the number of articles produced. We hope that before long there will be a good supply of utility pottery at fixed prices. The Central Price Regulation Committee has spent much time on that problem. Holloware: We have reduced by some 60 per cent. the types and sizes of kettles and other pots and pans, and we hope before very long that we shall have a larger supply of these necessary articles coming forward. As to umbrellas—for people who carry them; I do not—we are standardising these down to two sizes, and we are taking out half their ribs. Those which had 16 ribs will now only be allowed to have eight. We 216 are going to impose a maximum content of cloth and steel in umbrellas. Furniture presents a very difficult and important case. There have been many justifiable complaints from the public of the high prices and the poor quality of the stuff being sold as furniture in many shops. At the same time, more labour and more timber are being used in furniture manufacture than can be afforded on a broad view of the national resources. There are innumerable different types and sizes of furniture, so that effective control is very difficult. It is difficult to define the articles.
In view of all these considerations, I decided some little while ago that we must have some utility designs leading up to utility production. I have appointed to advise me a committee which includes not only expert designers and manufacturers, but also people who know what the public wants, including two women. One is what would be commonly described as a working woman in the sense that she works for her own living. She is, in fact, a cook in a canteen, and she is a very good judge of what is required in a working-class home. The other woman has a long record of work in connection with the designing of houses, furniture and so on. It is a good committee, and it is getting on with its work, and I hope that before long specifications will be ready. I should like to publish some of them and some of the models when we have them. I hope that by the late autumn good utility-style furniture at fixed prices will be coming into the market to be available for those who really need it.
In addition to that, utility production is now proceeding in pencils, mechanical lighters and household textiles, which will come in greater quantity soon. I am planning for utility cutlery and suit cases. I believe that the further development of utility production will be of great value in maintaining the essential supplies of the civilian population.
§ Sir Patrick Hannon (Birmingham, Moseley)
I apologise for interrupting my right hon. Friend, but will he tell me what selective process he adopts in picking out the various industries for concentration?
§ Mr. Dalton
I have passed for the moment from concentration to utility production. On concentration, we have discussions with the trade associations con- 217 cerned, and some of my advisers, including civil servants and business men from the Board of Trade, enter into consultation with them. As far as possible we wish the traders themselves to take the initiative in putting up these concentration schemes, and in most cases they have done so.
§ Mr. Dalton
If the hon. Gentleman wants us to look into fountain pens, we will do so. The Parliamentary Secretary is to reply at the end of the Debate, and I suggest it would make for the convenience of later speakers if I were not required to interrupt the line of argument too much at this stage, as it might lead to my taking longer than I want to do of the time of the Committee. The question of fountain pens will be noted, and a reply will be made at the end of the Debate.
There is a further point in connection with the policy of concentration. I have spoken so far of the concentration of different firms and of utility production of a number of commodities, but I want to say a word on what may be called the concentration of products. In connection with the developments of which I have been speaking and the need to get the maximum output of essential articles for the civilian population, it has been felt for some time that the old Limitation of Supplies Orders were not quite enough. They operated upon groups of products. There was a limitation on the total glassware, for example, that might be sold. We have felt that, the time has come to concentrate production upon particular articles within the group which are most urgently needed by the consumers. Therefore, in the case of glassware, we are concentrating as from the beginning of August, subject to one concession that I will mention, upon the production of tumblers, jugs, mugs and small mirrors. We have decided that, on the whole, a small mirror is as good as a large mirror on the wall. If it is large enough for one to see one's face, it is large enough for practical purposes.
§ Viscountess Astor (Plymouth, Sutton)
It is dangerous to have' mirrors at all. They discourage people in war-time.
§ Mr. Dalton
The noble Lady is evidently prepared to carry the matter further than 218 I am. We are proposing to cut out inessential products as well as inessential general lines of products. In the case of jewellery, we propose to limit production to clocks and watches, identification bracelets, cuff-links, studs and plain wedding rings. I am advised that we have a large stock of engagement rings, and therefore it is not necessary for the moment to add to them. I hope what I have said will illustrate the general policy being pursued of what I have called concentration of products. There will be a special saving clause, in the case of factories or workshops or groups of workers, who really cannot be transferred from what they are now making to making anything in the essential list. We are prepared, in special cases, to issue licences permitting them to continue the production of what they are producing now if they can put up a really strong case that they cannot be transferred, and if the materials are available for them to continue their present production. The policy I have outlined will be administered flexibly. We estimate that it will release 30,000 additional workers for munitions or the Services, and it will not merely maintain but will actually increase the supply of articles which have recently been in short supply, by transferring manufacturing facilities to them.
§ Mr. Woods (Finsbury)
Is is proposed to continue the very rigid price control of the articles to which special supplies are allocated for utility goods?
§ Mr. Dalton
Yes, certainly. I have explained that one of the reasons for the whole utility policy is that it facilitates price control by defining and limiting the range of articles. All these utility goods will be subject to price control, subject to recommendations made to me by the Central Price Regulation Committee on the one hand and by my officials who study these matters on the other.
I am anxious to turn at this point to what is, I think, the most difficult problem facing the Board of Trade, namely, the question of non-food retail shops. I know that many hon. Members are anxious to speak on the subject, and I wish myself to say something on the topic now. One of the reasons why the problem of true retail trade is so difficult is the lack of reliable information. Looking back to the days before the war when everything was so much easier, 219 we must all regret that no proper census of distribution was ever taken. We have information about many industries, such as mining, but our information about the retail trade is seriously deficient. That circumstance greatly increases the difficulties of our task now in dealing with the problem. On the other hand, we know a great deal in broad outline, and I would like to give the Committee the most accurate picture I can of the present situation in the retail trade. First of all, we know the volume of the turnover, the quantity sold in the non-food shops. I am speaking entirely of non-food shops, because food shops come under the Ministry of Food and are not in Order on this Vote. That volume had fallen substantially before the war, and it is also quite certain that it must fall further in the period ahead, as a result of the regrettable but inevitable further diminution of the total available civilian supplies.
§ Mr. Denville (Newcastle-on-Tyne, Central)
How is it proposed to deal with the question of the small traders, the Majority of whom have not combined?
§ Mr. Dalton
I am trying to give a general picture. I was saying that the volume of trade has fallen and must fall further. On the other hand, the value of the goods—and here I include the Purchase Tax, and I will give the figures in both forms, including and excluding Purchase Tax—sold in the shops has, up to now, been maintained at a reasonably high level. For example, in the year ended 31st May, 1941, the total value of non-food retail sales, including the Purchase Tax, was 6 per cent. above the pre-war level. In the following year, ended 31st May, 1942, it was still 1 per cent. above the pre-war level, but that figure covers wide differences in different articles.
§ Mr. Dalton
They are in the possession of the Board of Trade; similar figures were put before the Retail Trade Committee for their deliberation. These are Board of Trade figures based upon our own inquiries, and many of them are published in the "Board of Trade Journal."
220 If I may take different articles to get a picture of the position, the sales of footwear last year—I am still talking in terms of value including Purchase Tax—were no less than 33 per cent. above the pre-war level. On the other hand, the sales of furniture were 15 per cent. lower, and of hardware and crockery were more than 20 per cent. lower. I mention that to show the variation between different articles. Another very interesting figure is the very sharp drop that has taken place in the number of bankruptcies in the non-food retail trade as compared with pre-war. In 1941 there were only 161 bankruptcies in that section, as compared with 1,280 in 1938. We should not, of course, take too much comfort from those figures. There are reasons for them, none the less they are very interesting. There is no doubt that the diminution in the number of bankruptcies is partly due to the fact that stocks can be disposed of very easily compared with pre-war days, so that when a man closes down he has no difficulty in disposing of his stocks and paying off, at all events, a large part of his debts.
§ Vice-Admiral Taylor (Paddington, South)
May I ask if the proportion of bankruptcies has diminished in the same way as the number? Comparing the numbers in the trade with the number of bankruptcies before and after the war, is there the same reduction?
§ Mr. Dalton
Yes, not only the total number but the proportion is very much less. I am anxious, however, not to dwell too much on that for the reasons I have just mentioned; it is only one of the elements in the picture.
Let me now give figures excluding Purchase Tax. In the year ending 31st May, 1942, excluding Purchase Tax, there was a drop of 12 per cent. in the value of sales, and that shows that there is, as we all know, a considerable decline in the total. But within this general picture there are large differences between different classes of retailer. That has been borne in upon me very forcibly during my discussions recently with various sections. Chemists, tobacconists and booksellers are all continuing to keep up a fairly high level of trade. On the other hand, the position of furniture, hardware and clothing is much less fortunate. These are all very difficult cases. Also I wish to give one or two very interesting 221 figures to the Committee showing the very wide differences which exist between the state of retail trade in different areas of the country. Broadly speaking, in Scotland and in the North of England retailers since the war have done far better relatively to pre-war years than they have done in the South of England, particularly in London and the South-East. The figures here are quite remarkable. These again are Board of Trade figures which are comparable with those furnished to the hon. Lady and her colleagues on the Retail Trade Committee.
The figures for May, 1942, show a fall in the value of sales compared with a comparable pre-war month of more than 35 per cent. for London, West End and Central, That is a very heavy decline. I have not got separate figures for South-East England, but there sales will obviously have declined much more than in the South-West. All I have is an aggregate figure for the South of England showing an over-all decline of 2 per cent. On the other hand, there have been a number of rises in the value of sales as compared with pre-war: a 14 per cent. rise in the Midlands, 14 per cent. in South Wales, 17 per cent. in the North-West of England, 23 per cent. in the North-East, and 25 per cent. in Scotland. These, of course, are the distressed areas, getting rid for the time being of their distress, and benefiting from the full employment of their people, from the arrival of troops in the area, and so on. These figures suffice to show that depression in the retail trade is not at all smoothly spread and is not at all universal.
How far has there been an actual contraction in the retail trades up to date? Here our information is not at all complete, but the Retail Trade Committee have published some very interesting figures in the Appendix to their Report, which I judge hon. Members will have read. There are fairly complete figures for departmental stores, which have lost 25 per cent. of their space and over 30 per cent. of their staff, co-operative societies have lost about 5 per cent. of their space and 15 per cent. of their staff, multiple shops have lost 11 per cent. of their branches and 22 per cent. of their staff, and chain stores have lost 4 per cent. of their branches and 26 per cent of their staff. That gives a rough picture of how various sections 222 have been effected. The Retail Trade Committee has also arranged for a very valuable survey, which has been most helpful to us, in seven medium-sized towns. If hon. Members who have the Report will turn to table 9, at the bottom of page 36, they will find some very interesting figures. Seven medium-sized towns are not a large sample, but I think they form a fair sample representing what has been going on all over the country. The moral of the figures is that relatively speaking small shops have lost ground very heavily. For instance, the Committee will be surprised—I was—to see that the very large shops have increased in number by 4 per cent., and large shops by 4 per cent., in this time of stress and diminished supplies. Medium shops have increased by 3 per cent., medium small shops have diminished by 5 per cent., small shops have diminished by 11 per cent., and very small shops have diminished by 19 per cent. That is a very extraordinary thing, and it leads to various thoughts, some of which I will give expression to later. That is probably typical of the position all over the country, although it is based on a survey of only seven towns.
That is the picture I wish to draw for the Committee—a sharp decline of the physical turnover, a much more moderate decline in the value of sales, and a big shift in the distribution of turnover between different products, different areas and different types of shops, together with a considerable fall in the number of shops and in the total number of workers employed. Faced with this situation, what must the object of the Government be? I think I can state it in general terms which will command a fairly wide measure of agreement. First of all, we must make sure that there are sufficient retail outlets for the public. We must not create endless shopping difficulties, particularly at a time when people are working much harder than ever before. It would be a very poor policy to close down or cause the closing down of a large number of shops, and then find that because people had to go further to do their shopping there was more absenteeism, more lost time and long queues among war workers. We must maintain sufficient outlets for the reasonable needs of the public when so many of them are working so very hard and have only a limited time in which to shop.
223 In the second place, I must help to meet the demands made by the Ministry of Labour on behalf of the Supply Departments and on behalf of the Service Departments for ever more mobile workers to go into munition factories and the Services. That demand will continue, and it is the duty of all of us to help to meet it. Now most of the men from the retail non-food trades have been taken. The labour problem is chiefly that of the younger women, and it has been suggested that most of the available mobile labour capable of being transferred to munitions which is now left is in the large shops, not in the small shops, and moreover that the premises of the large shops are more useful for other war purposes than the small shops can possibly be. In the third place, we must keep the cost of distribution per unit as low as we can. In the fourth place, we must avoid needless hardship, and we must bear in mind that the small trader, when a certain point is reached, is no longer able, as is the large trader, to restrict the scale of his activities but has to cease altogether. That should be borne in mind, particularly in view of the declaration made by the present Minister of Production, when as President of the Board of Trade he announced the appointment of the Retail Trade Committee. I shall here re-quote words often quoted before. He said that we must make sure that any measures which might be taken should secure a fair and equitable balance between the various trading interests concerned, both small and large. That is the policy of the Government, and that is the policy which I shall seek to apply. [An HON. MEMBER: "It is impossible."] Many things are impossible. I will repeat again that the idea is to secure a fair and equitable balance between the various trading interests concerned. That is the policy of the Government so far as it can be achieved.
I want to refer at this stage to the third Report of the Retail Trade Committee published just over a month ago, and I wish to express my thanks to the hon. Lady the Member for Frome (Mrs. Tate) and her colleagues. They have worked very hard and have produced an extremely interesting Report, which I assume has been read by most hon. Members here. Therefore I will not spend much time in recapitulating it. I will just briefly summarise the recommendations. 224 The Committee recommend that as a wartime emergency measure a scheme of concentration should be initiated for the whole of the retail non-food trades. Their scheme is intended to facilitate voluntary withdrawal during the period of emergency. It is not a planned concentration imposed from outside; it rests upon the establishment of an insurance fund to assist those who voluntarily withdraw from the industry. The Commitee propose that there should be a levy which at first might be fixed at 1 per cent. on turnover, compulsory on all non-food traders, including confectioners, who have a turnover of more than £1,000 a year. Those below that might come in or stay out as they please. There are to be two forms of benefit, a standard benefit of 5 per cent. per annum on the turnover to be paid so long as obligations for rent or its equivalent continue, and also a special benefit payable at 5 per cent. per annum, limited to a period of six months, and limited to the first £5,000 of turnover, with a maximum of £125, and that would be paid without regard to whether there were contractual obligations on the withdrawing trader or not. The Committee also recommend, as a condition of continuing in business, that traders should be obliged to register, and that the right of re-entry should be given to withdrawing traders, and that that right should be retrospective in respect of those who have ceased to trade as a result of the war.
Immediately on receiving this Report I decided that before forming any firm conclusion on it I must learn the views of interested parties. I have had a number of consultations during the past fortnight with interested parties. They have just been concluded, and I will briefly summarise the views expressed to me by those consulted. There is no use in disguising the fact that the prevailing opinion among those I have consulted was definitely hostile to the proposals of the Committee. Having read the minority Report signed by Mr. Palmer, I was not surprised to find that the Co-operative Movement was opposed to them. I think that my hon. Friend the Member for East Ham South (Mr. Barnes) is to speak later on that. On the other hand the trade union representatives of the National Union of Distributive and Allied Workers and the Shop Assistants were on the whole favourable. The National Chamber of Trade was on the whole very critical of the Report. They 225 said that the real problem was not how to facilitate withdrawal but how to keep the small trader in business, and they felt that the larger shops were getting a disproportionate share of the available supplies, and were being too generously treated in respect of the call-up of labour. They made a number of suggestions. The Drapers' Chamber of Trade were favourable but desired steps to be taken to secure a fairer distribution of goods to small traders.
Neither the Retail Distributors' Association, who speak for departmental stores, nor the Multiple Shops' Federation considered that the scheme afforded a saisfactory solution, and took the view that the benefits would go to landlords and mortgagees rather than the traders themselves. They made a number of other criticisms which I will not repeat. The Association of British Chambers of Commerce were very divided, but on the whole they were opposed to the scheme. The Southampton Chamber of Commerce have been kind enough to send me their views direct. They said that their Chamber viewed with the greatest concern the third Report of the Retail Trade Committee and heartily and completely rejected it on grounds which they set out.
§ Mr. Dalton
Anyhow, places were divided. With regard to the levy, when they came to see me the Association of British Chambers of Commerce pointed out that in the case of prosperous traders paying Excess Profit Tax the Government would in fact make a contribution, and in the case of those paying Income Tax but not Excess Profit Tax the Government would pay half, and that it was only small traders and others making no appreciable profit who would have to carry the whole of the levy themselves. Finally, in this series of consultations I can group together the National Pharmaceutical Union, the Company Chemists' Association and the associations of newsagents, tobacconists and confectioners. They were all bitterly opposed to, and hostile to, the scheme, on the ground that they had a sectional interest and were not to be regarded as 226 part of the retail trade as a whole. They did not wish to come in. The chemists said that they were a specially qualified body performing a public service.
§ Mr. Dalton
In counting opinions it is only fair to say that, rightly or wrongly, they were all opposed to the scheme and did not wish to come in. This survey of opinion which I have been carrying out has revealed a formidable array of opposition among the interests affected by the proposal, and the Government must necessarily take account of these expressions of opinion. But I give an assurance to the Committee that the Government will give most careful consideration to the report and to any observations that are made to-day by any hon. Member in any part of the Committee on the subject both of the recommendations in the Report, and any other aspect of the matter, because there are other aspects which naturally were not developed in the Report. The Government have not yet taken a decision on policy, and it would have been wrong, as I have said in answer to questions some weeks ago, had it done so before debate and discussion so that we might know what is thought in various parts of the House and the trade. I am anxious not to proceed at any length at this stage. I will merely say that there are a number of technical points arising out of the Committee's recommendations into which I am going carefully. So far as their proposal that the levy should be classed as a business expense for all trade purposes is concerned, I can say that I think there would be no difficulty about treating contributions as an expense for taxation purposes, because that is done now for payments under industrial concentration schemes, which are somewhat analogous. To treat the levy as an expense for purposes which includes the fixing of prices is rather more difficult. I am not saying "yes" or "no "; but it is only fair to give the warning that the Government do still attach importance to keeping the cost of living as low as we can, and that, in so 227 far as the levy would result in a rise in the cost of living, it would be a serious matter. A number of those who saw me, including the tobacconists, said that it would be a very heavy levy indeed upon them, and that they would not be able to pass it on.
I want to speak of one or two matters about which, although they are touched on in the third Report of the Committee, I think there is something more to be said. The Committee made proposals, in paragraphs 44 to 47, for establishing fresh conciliation machinery to assist the withdrawing trader who cannot meet his obligations. There has not been the same criticism of those proposals as there has been of some others. The question of the Liabilities (War-time Adjustment) Act, and the use made of it, should be gone into more fully, not merely from the point of view of withdrawing traders but from that of continuing traders. It is a question worth studying whether some of these fixed charges, which have come from the days of peace, when conditions were so different, should not be alleviated in some way without insolvency being involved in applications to officers under the Act. That is one of the matters that I intend to look into.
I have constantly in these consultations been met with the suggestion that the small trader is not getting his fair share of the available supplies. Clearly, that must be investigated. One man told me that they did not want a burial benefit but that they wanted a fair share of what was going now. One said that he did not want a burial benefit payable to his landlord. They nearly all emphasised that they were getting a smaller proportion of what was available than they used to get before the war. I asked several of the spokesmen of these associations to get me as much evidence of that as they could. It may be that many of the small traders are unduly optimistic about their capacity to see the war through without taking advantage of such facilities as are suggested in the Committee's Report. But one cannot but admire the spirit which animates many of those who want to keep their flag flying. I notice a lot of that spirit in the lately depressed areas, like my own constituency, where they say, "It cannot be so bad again as it was when nearly everybody was out of work." I should 228 not be at all surprised if many manufacturers and wholesalers find it pays them much better to make large deliveries to large shops, rather than to make a series of small deliveries to small shops. It must be borne in mind that, with the petrol restrictions and difficulties of distribution, it is cheaper from their point of view to do that. But there is enough evidence to satisfy me that the whole question must be looked into, and I am prepared to go into it, with the aid of all those who can give me any information.
Quite apart from the interests of the firms, there are two reasons why the small man should be able to get supplies. First, in the rural areas there are no large shops, and, therefore, a maldistribution between the large man and the small man means maldistribution against the countryman. That is most undesirable. Secondly, the mobile labour still to be drawn out is probably in the large shops, and if the Ministry of Labour cut down the staffs of the large shops which have a large turnover, those shops will no longer be able to handle that turnover, while the small shops will not be able to get sufficient turnover to keep themselves occupied. I will look into that matter, and I shall be glad of any assistance from the House or from the people concerned.
I would like to take action on this matter soon; but I must first be sure that the action I take is in the right direction, and that it has the support, at any rate, of a substantial proportion of those affected. It would be foolish to try to force down the throats of those engaged in retail trade a scheme to which a considerable number is opposed. I do not share the view that it is practicable in war time—and probably it is not at any time desirable—to have a thorough-going rationalisation of the retail trade, so that we have nothing left but multiple shops and chain stores. I am sure that that is not desired in the country. The independent shopkeeper has his contribution to make, and he adds to the pleasures of life for people who do not regard shopping as a disagreeable necessity, but who, when they have time for it, regard it as a pleasant way of spending time. Although in war-time we have to give up many luxuries and many ways of life to which we are accustomed, I would not, in peacetime, like to see life made so drab.
229 The Board of Trade is concerned with a great number of the nation's economic activities. With many of these I have not been able to deal to-day. I have said nothing about clothes rationing and very little about price regulation, I have barely touched on the exports side, and I have said nothing about war damage or about films, which is another of my children. The chief task which has confronted me since I became President of the Board of Trade has been the home front task of, on the one hand, safeguarding the supplies necessary for the civilian population in time of war, and, on the other hand, assisting my colleagues in other Departments in making every worker, every ounce of material, and every ton of shipping space, not needed for civilian consumption, available for direct war service. I have described how we have gradually proceeded through different stages in that way. These activities are in many ways very disagreeable activities. They uproot people's lives and they disorganise many of the instruments of our trade. They result from the impact of the war on the civilian life of a civilised community. The only justification for them is that they are necessary to win the war. That, I believe, is sufficient justification. I ask, on the one hand, for the assistance and counsel of hon. Members in all parts of the House in considering how best these restrictions may be imposed, so as to cause the minimum dislocation and inconvenience and to make the maximum contribution to victory. On the other hand, I ask for the encouraging support of hon. Members—and I believe I shall have it—for all steps which are shown to be necessary in order to mobilise the home front, so that victory may come soon, and come completely.
§ Mr. Mander (Wolverhampton, East)
My right hon. Friend the President of the Board of Trade has, in a very interesting way, dealt with certain aspects of the great responsibilities which rest upon his shoulders, and I shall confine myself in any comments I have to make to these particular subjects. I think it would generally be agreed that the remarkable revolution of the concentration of industry—because it is nothing less—has been carried through in a very peaceful manner, and much more with general agreement than seemed possible when it was originally introduced. The President of the Board of Trade has said that the 230 future is not pre-judged and that it is open to all the firms that have been concentrated to open again after the war, but it will generally be agreed that in a great many cases at any rate that is not likely to take place. Many of the firms that have been taken over will never restart business again. What the Government have been doing is to hasten the inevitable process of the times in bringing about large aggregations of capital and no doubt involving greater Government control and investigation and that sort of thing, and this can no more be stopped than Canute could stop the inflowing of the waves. The firms that have been brought into these larger units—sometimes 10 per cent. of the whole of an industry is all that remains—will come to realise the many great advantages that accrue, and they will not be inclined to go back to the very much smaller way of doing things. The larger units are much more economic and satisfactory in many ways. At the same time, I hope that in future we shall have no dull uniformity of treatment and that there will always be room for the small man with his energy and enthusiasm, for future Nuffields and people of that kind who are able to bring in the drive of private enterprise which is so essential and vital in our national life.
In the concentration schemes that have been put through the question of goodwill has been well dealt with on the whole. Arrangements have been made for maintaining the sales organisation, and that has enabled the goods of many of the firms which have been temporarily closed down to go out under their own name, but still one cannot help wondering how far it is really justifiable to keep sale organisations going because they are employing a certain amount of man-power, which one would have thought, was hardly justified in present circumstances. My right hon. Friend referred to the two types of concentration—voluntary and compulsory. It will be agreed that the voluntary schemes have been much more satisfactory than the_ cases where the Board of Trade has had to step in and impose its own views. There is one point to which I would ask my right hon. Friend to give special attention. When a decision has definitely been made that certain firms are to be nucleus firms, an Essential Work Order should immediately be issued. I can see that there may be 231 difficulties in doing that until that stage has been arrived at, but when that stage has been reached I can see no disadvantages, and there are many advantages, because the firms who are to be placed in that position must be able to keep their employees. The conditions vary in different parts of the country in accordance with the scarcity of labour, but it is a very important point to which my right hon. Friend ought to give attention.
There is this point too. I believe at the present time definite action by the Board of Trade is being withheld for political reasons. I mean in the sense that, where you have a shortage of supplies some of which might go to the private trader the rest to war work, there is a tendency to say, "We must leave some for the private trader to go to the public, because they have been so accustomed to use this or that kind of article and you must not interfere with the habits or the free will of the subject to do what he has been accustomed to do. There might be questions and representations made in Parliament." I hope that my right hon. Friend will impress upon his staff that they need fear nothing of the kind. The House of Commons will be wholeheartedly behind his Department in taking firm and drastic action even if it interferes with the ordinary and normal habits of the citizens of the country. All supplies required for war purposess should be used for these purposes and for no private purpose whatsoever. The question of compensation has been dealt with only up to a point. There are inescapable charges which are generally agreed, but the question of the profit has not reached anything like so satisfactory a solution, and it would be interesting if the Minister who is to reply can say something more about the basis of compensation, both in respect of inescapable charges and profit.
§ Mr. Mander
Within the concentration scheme in respect of factories which have been closed down. A certain amount of hardship is absolutely inevitable in respect of manufacturers and traders generally, and many of us, quite apart from taxation, are in an infinitely worse position than was the case before the war. We cannot expect to get compensation for 232 everything. The people who feel the burden of hardships have only to think of their lot compared with that of the air crews, the men in the tanks and the seamen to feel how very light is the sacrifice that has been asked of them.
I will make one remark with reference to the utility side of my right hon. Friend's argument which occurred to me as he was making his speech. With regard to the Committee which is investigating the type of article that is to be produced, he referred to designers, and I would like to know whether that includes persons who are able to give advice as to the artistic appearance of the articles that are to be produced? Because an article is to be cheap and standardised there is no reason at all why it should not be made beautiful and attractive too. It is very important to deal with that point.
§ Mr. Dalton
Certainly, Mr. Gordon Russell is a member of that committee, as well as other well-known people.
§ Mr. Mander
Developing within the concentration scheme and inevitably affected by it we shall in the future, I hope, have conscious planning in this country of the life of the nation, giving at the same time the freest play to individual initiative. I hope also that we shall have more of the spirit of service to the community and less of the scramble for dividends. Important industries will undoubtedly be brought under some form of State control, such as public utility companies or whatever may be the most suitable manner to be decided upon, in the way of manufacture, transport and distribution. This brings me to the question of distribution and the retailer. The question of food supplies is not before us to-day, but I should have thought that there was a great deal of room for the State to come in and play a big part in the sale of food in the future owing to the obviously very wasteful methods that are being employed at the present time in certain sections. We are dealing to-day with non-food shops, and we have had representations from a great many quarters brought before us. We have, as our basic document, the Report of the Retail Trade Committee—
§ Mr. Rhys Davies (Westhoughton)
Does my hon. Friend suggest that the State could do the work of distribution better than the co-operative societies?
§ Mr. Mander
I know my hon. Friend thinks no one in the world can do anything better than the co-operative societies. They do most valuable work and are a vital part of the life of the community, but I do not think they should be considered exclusively to be above all other forms of human activity. As I was saying, we have before us recommendations from various bodies, and I wish to introduce a new one. It so happens that during the last two years there has been a committee of the Liberal party—the Liberal Independent Traders Inquiry Committee—studying this matter with the desire of making a contribution to this national problem, and making reports from time to time, particularly with reference to the situation as we find it to-day. Some of the comments I wish to make are based largely on the reports of this committee. I think we have to bear in mind when dealing with shops that there are two fundamental differences. In the case of a man called up compulsorily for the Forces so that he loses his business there ought to be full compensation, and it ought to be retrospective from the time he has to go. In the other case of a man whose business is closed because of restriction of supplies, that certainly requires compensation, but the person concerned has not anything like so strong a case as the man who has to go into one or other of the Services. The Retail Trade Committee have made some excellent recommendations, but I do not think they are adequate in all respects. It accepts the principle of compensation which is right, but it seems to me that too much compensation goes to the landlord and not enough to the trader himself. The Report contains no definite plan as to how shops are to be closed. If things are left as suggested in the Report they will go on closing haphazardly in the way they are going on at the present time.
§ Vice-Admiral Taylor
When the hon. Gentleman talks about benefit going to the landlord and the mortgagee, is it not a fact that the money which is paid to them is paid on behalf of the tenant to enable them to maintain their premises? That is most important.
§ Mr. Mander
That is a point of view which my hon. and gallant Friend is entitled to put. I was stating it in my own way. There are, I suggest, four tests which ought to be applied to any ques- 234 tion of closing shops. First, what are the needs of the shopping public? In each case one ought to see in what direction our conclusions lead us. In reply to that test I think it is clear that the needs of the workers are best met by having a number of small shops scattered throughout different parts of an industrial area rather than that the public should have to go to a large shop in the centre of the area. Second, there is the suitability of the staff for war work. Again, in small shops owing to domestic problems and the age and health of the people employed, they are much less suitable for war work than those in larger shops. Third, there is the suitability of the premises for war work. Again, small shops are not suitable, whereas larger premises are suitable for setting up offices and things of that kind. Fourth, there is the question of comparative hardship. The small trader loses everything, whereas the larger shop is in a position to carry on on a smaller scale. Looking at these four fundamental points, we are driven to the conclusion that small traders ought to be specially considered and opportunities given to them rather than the large trader to remain in business. But, as we have seen from information given us to-day, it has worked out the other way round, which is not a very satisfactory state of affairs.
The question of contributions for compensation has been raised and no doubt it would be possible to arrange some scheme of contributions. That would be a valuable asset, but at the same time I think we ought to appreciate that the position is quite different from that involved in the concentration of industries. Where you have concentrated industry nucleus firms will be called upon to make some contribution for compensation for those which have closed and they would be able to do it because the Government will flood them with orders. They will be in a position to work full time, whereas the contribution of the Government towards many shops is to restrict their supplies. There is a fundamental difference between the two positions, and I should have thought that there was doubt as to whether a levy was practicable. I think it is a case where State funds ought to be made available for the purposes of compensation. I would ask the Minister to consider whether he can work out some machinery on these lines—that the local 235 price regulation committees, which are largely representative of the consumer interest, in conjunction with the Joint Industrial Councils for Retail Trade, should register all shops and decide which should be kept open and which should be shut. There you have a representative body, working at the present time, which seems to be fitted to carry out a duty of this kind.
Compensation should be on the lines to which I have already made some reference, and people should be given a chance of restarting after the war, although I do not think a man who has had to go into the Forces ought necessarily to have to take his compensation in the form of restarting in the same business. He might be given assistance towards starting in something else, if he desires it and it seems reasonable. There should be controlled re-entry into the shopping business, and if there is to be controlled re-entry, surely there ought to be controlled withdrawal too. No arrangements have been made for that. Finally, I would say that undoubtedly the State will, after the war, enter territory not previously occupied, and we must take care that in that advance the small man is fitted in. We must not lose the immense benefit to the nation of the initiative and drive of the individual, whether he is large or small.
§ Major Procter (Accrington)
I will not take up the time of the Committee for more than a few minutes but I wish to congratulate the Retail Trade Committee, for giving us for the first time a factual survey of the retail trade position. It is very helpful to know that we are discussing to-day the affairs of a very important section of the community and that there is great national interest in this Debate and the results which may arise therefrom. Over 1,200,000 people are dependent upon retail trade for their livelihood, and we must remember that we are dealing with almost astronomical figures inasmuch as the turnover of the retail trade, in commodities other than food and drink, amounts to over £1,200,000,000 per annum. We are dealing also with matters that affect municipalities in that they depend upon rate-paying shops to the number of over 300,000 for success in carrying on our civic life and the amenities which attach thereto. I am sorry to see that in this 236 Report, brilliant though it is in the survey it gives us, there is throughout its pages a defeatist line of thought. It seems to assume that the small retail trader is doomed to extinction. I, for one, am out to see that no action of this House will crush these men and women out of existence, for they have been the backbone of this nation and have built up the prosperity of the land. I am opposed to any political group in the House using this Committee for political profiteering. It seems to me that in essence the Committee says to those who are to be liquidated, "Go and commit suicide and then pay for your own funeral." The Report is defeatist throughout.
As to the causes of the difficulties confronting the retailers, we are told they are due to the war, but in my opinion a great many of the retailers' difficulties are due to a wrong policy of the Government in the matter of equitable distribution of supplies. For instance, with regard to the fixing of the quotas, no small retailer has by legal right any quota at all. He or she depends upon what is handed to him or her by the manufacturer as an act of grace. The large shops, the chain stores and the department stores, all with a big purse, are able to get supplies which the small retailer cannot get. There is in the Report no suggestion for helping the small retailer to get his fair share of goods. It tells him to prepare to die, not how to survive. It gives no advice how to overcome the difficulties due to the control of prices, and such impositions placed upon the small retailer by this House—such as coupons, rationing, and all that sort of thing. It takes a small retailer as long to fill in the forms and coupons sent to him by the Government as it does to serve his customers. There now descends on the small retailers of this country as much paper as falls on a New York procession for national heroes. There are all kinds of forms and almost incomprehensible departmental instructions to which he must give most careful heed, one of which I will read, and which I defy any retailer or any hon. Member to make out. It reveals the Civil Service mentality towards business affairs:Where goods are or were invoiced by a registered person who in relation to the supply of these goods is or was the agent either of the supplier or of the person to whom or to whose order they are or were to be supplied, the supplier shall be deemed to supply or to have supplied these goods to the agent, and, 237 when the goods are or were supplied, to or to the order of the person to be supplied, the agent shall be deemed to supply or to have s applied them.That is the sort of thing which the small retailer comes up against, and yet we are told that the retailers' difficulties are due to the war. There is nothing in the Report which will help to free these little men from the throttling hold which we politicians by rules, regulations, and controls have put upon them.
I promised to speak briefly, but there are one or two points I want to put to the President of the Board of Trade in connection with the third Report. I was very pleased to hear the note of sympathy in the right hon. Gentleman's voice when he spoke about the small trader, but he will remember that in "Alice through the Looking Glass" there is the story of the walrus and the carpenter who swallowed the oysters most sympathetically—but, nevertheless, that was the end of the oysters. I want to tell the President of the Board of Trade, as he knows, no doubt, that over go per cent. of the small retail traders are against the Committee's Report. They do not want it.
There is, I know, a scheme of compensation, and I know the arguments that can be quoted by the Government against the payment of compensation from the National Exchequer, but I ask the right hon. Gentleman to look into the incidence of the figures set out by his own Committee. On a turnover of £1,200,000,000 a 1 per cent. levy will yield an income to the fund of £12,000,000 every year that the scheme is in operation. There are over 300,000 shopkeepers in the non-food and drink trades. If 10 per cent. of the shopkeepers go out of business, there will be £12,000,000 available for division among them. That is a very large amount. I want to know who is to get the difference between the amount that comes into the fund and the amount that goes out as compensation to the shopkeepers who have been liquidated. There will be far more money coming into the fund than goes out of it. What is to be done with that money? In regard to the proposed scheme of compensation; my local chamber of trade want to know what will be the position of the owner-occupier, who is mentioned in paragraph 35 of the Report. Will he receive a sum 238 equivalent to the rent he would have to pay as a tenant, or only such sum as is necessary to cover his actual outgoings, such as fire-watching and insurance? With regard to the rent-paying tenant, who is dealt with in paragraph 33 of the Report, it is suggested that he should be permitted to leave his fixtures. Does the President of the Board of Trade intend to approach the municipalities, with a view to getting them to allow the shops to be derated in those circumstances, because under the present law, I understand that if a person leaves fittings in the shop he has to pay rates. It is recommended by the Committee that at the earliest opportunity the lease should be broken. What, then, would happen with regard to fixtures? Is it likely the landlord would allow the fixtures to remain when no rent is being paid? Who is to be paid for their removal and destruction?
There are many other questions on which the Report gives no guidance at all. For instance, what is the position of a one-man limited company whose premises are owned by the principal shareholder? Is he to receive the benefit while he occupies the house? Lastly, I condemn this Report because, if the suggestions are carried out, it will give the benefits to the people who do not require them, namely, landlords and owners of chain and multiple stores. If a large department store closes a floor, will it be permitted to continue the same number of departments in the smaller space, and, if a branch of a chain stores is closed, will the firm be permitted to buy and sell the same quantity of goods in the shops remaining? If that is the position, it will mean that the, big men, who are putting away reserves year by year to improve their competitive position after the war, will have more goods to sell because they will get the goods of the people who have gone out of business. I hope that the President of the Board of Trade will go into these matters very carefully. It is the small man who needs protection. Large stores can look after themselves. The small trader has no trade union to back him, and he is the man who is suffering. If he becomes a war casualty by State action he should be compensated by the State. The small shopkeeper is a worthy citizen and a stabilising influence in every community, and we must see that we do nothing to impair his position. We must not allow 239 him to be crushed out of existence either in the interest of big business or of national ownership of our shops.
§ Mr. Barnes (East Ham, South)
My right hon. Friend, in reviewing the administration of his Department, paid a well-deserved compliment to his predecessors for initiating the policies which we are discussing to-day, and I should like to take this opportunity of stating that my right hon. Friend has not let these policies down. His administration maintains the drive, and I should particularly like to acknowledge that his administration has, at least, forced the coal problem to a solution after two years of procrastination. I was gratified that the President of the Board of Trade was able to report the consultations he has had with various sections of the retail trade, which, in my view, have had the effect of lifting this Debate and the consideration of the Report of the Retail Trade Committee out of the atmosphere of antagonism and competition between the large stores and the small shopkeepers. From my examination of this Report, I have been impressed that this is by no means a small shopkeepers' problem; the reactions of the different sections of the trade should be reflected here, and we should all acknowledge the freedom of mind in the Government at the present moment, and put our personal experiences into these discussions to enable them to come to a wise decision.
May I follow the procedure of my right hon. Friend and comment on the process of the concentration of industry and express one or two views on utility products before coming to the main item of interest, namely, the Report of the Retail Trade Committee? Reviewing the application of the policy of concentration, and knowing how tenaciously we fight for our respective interests in trade, I think that the comparative smoothness with which this policy has gone through indicates two things. First of all, in the general trading community in the country, as elsewhere, there is a genuine desire to co-operate with the executive Government of the day in order to facilitate our internal adjustment and to secure our main national objective, namely, the winning of the war. If we had not had that very deep-seated feeling in all sections of our national life, I am certain 240 the President of the Board of Trade would not have been able to pursue this policy with such ease. On the other hand, I should be one of the first to recognise that the President of the Board of Trade's representatives have done their part of the business wisely. They have adopted a most reasonable attitude, and in consultations they have tried to understand the difficulties. They have pursued their policies by wise adjustments, and we have obtained results which might have eluded us without that co-operation on both sides. This progress of concentration will undoubtedly be proceeded with in a more or less rapid degree, and I ask my right hon. Friend to bear these points in mind.
One of the most unfortunate experiences which owners and manufacturers find is the conflict of movement and decision of the respective Government Departments. A factory is concentrated by the Government to accomplish two purposes, to economise in efficiency of production, and to release labour for war services. If the Government adopt that attitude in a factory, it should not be requisitioned by another Government Department for some other purpose. There ought to be a clear division of responsibility and collaboration between the various Departments so that there is no overlapping. Sometimes the whole of a factory is not taken over and another Department steps in, and this causes a good deal of chaos. In the case of concentrated factories, one assumes that the residue ought to stand high in the category of priority of labour, and that problem ought to be considered. Where a firm has been considered as a nucleus firm, the Essential Work Order should be applied to that undertaking. If we could get that degree of co-operation between the various Government Departments concerned, avoiding two Departments scrambling over or interfering with the same type of work, and a measure of priority of labour, it would facilitate the position very considerably.
With regard to utility goods, I should like to urge my right hon. Friend to expedite this policy as rapidly as possible. We have to recognise that three years of war have passed before we have begun to tackle this problem effectively. In the case of boots, which were scheduled to come on the market early in June, they have not yet made their appearance to 241 meet the public demand. I feel that in three years more progress could have been made with utility lines. The same kind of criticism of Government administration can be made in this direction. Too often a Government Department publicises what it is proposing to do long before practical consultations have taken place and the goods are available for the market. We have to recognise that the public interpret statements of Government representatives as indicating that a policy is about to be put into operation, and, if you get these statements months before practical consultations have taken place, it is unfair to the traders and annoying to the public and it tends to discount Government announcements. The right hon. Gentleman indicated that, despite a contraction of 50 per cent. in certain directions, the value had not gone down. Prices in this range of goods have more than doubled on the whole. The Government have too often allowed prices to mount to too high a figure, and then, when they come with a controlled policy, either through utility lines or some other form of control, prices having mounted to an excessive degree, it is increasingly difficult to get them down. Therefore the tendency is to stabilise at too high a figure. The President indicated a wide range of goods that he proposes to bring into utility lines. He mentioned pottery, hollowware, umbrellas, furniture, pencils, lighters, suit cases and so on. How long will it take before these lines are actually before the public? Judging by past experience, a considerable time will elapse. If it is stated that these goods are to come within the range of utility products, the Government have the responsibility of pushing on this policy as rapidly as possible.
The next question I should like to bring forward is the application of the Purchase Tax to utility products. During the Budget Debate the Chancellor of the Exchequer indicated that, with regard to clothing and footwear utility products, there would be a remission of the Purchase Tax. As the Government policy is to produce utility lines with a minimum amount of labour and with the utmost efficiency of production, it appears to me that an overwhelming case is made out that on utility products there should always be a remission of Purchase Tax. I should like to press that that policy should be pursued, and any indication by the Minister might assist in that direction. 242 If the President finds that he is unable to cover the whole of these trades within a reasonable period, I would urge that the Department should apply its mind to a range of utility articles which might be termed essential domestic commodities. If the Board of Trade, while working out a larger policy of utility products, could take a range of articles in almost daily domestic use and requirement by the housewife, it would be very valuable indeed in household economy. A three-pint kettle which in 1939 cost 2s. 11d. costs 6s. 6d. to-day, and no one can argue that there is any justification for it. The quality is invariably inferior to pre-war. A hair broom which cost 4s. 3d. in 1939 is to-day 9s. 3d. A digging fork which cost 6s. 6d. in 1939 to-day costs 12s. Sheets per pair which cost 7s. 11d. pre war now cost 26s. and tea cloths have risen from 4¾d. to 1s.11d. Surely it is possible to take a range of articles in daily consumption and fix a reasonable figure.
It appears to me to be a wise decision of the Government not to commit themselves to the operation of the Retail Committee's Report. The President's consultation has indicated that there is a division between the large and the small trader. I do not thing the Committee need have any undue regrets if their Report is not accepted. It is no reflection on their Work. It is obvious to anyone with any experience of trade that there is a most difficult and complex problem to face with no probability of getting any measure of unanimity in the trade. The Report is certainly a valuable preliminary piece of work, but in my view the Committee should not take as a personal matter or as any reflection on their work any criticism that is bound to follow. The Report is full of contradictions, probably not because the mind of the Committee is not clear but because of the inherent difficulties of the problem they were examining. They at once recognised that you could not apply this principle to the non-food trades.
§ Mr. Barnes
I recognise that, but the implication is clear. Why should this particular group of traders be circumscribed by such a Report as this? I was anxious to avoid any opinion developing that this Report was designed to assist only the small retailer. The probabilities are that by actual experience one might find that the large departmental store or cooperative society or anybody in a large way of business would, if they desired to take full advantage of this scheme, benefit from its operation as much as, if not more than, the small retailers themselves. The Committee suggest that this is part of a system of planning the retail trade, but anyone who examines the Report at once recognises that it is nothing of the kind. It does not alter the structure of the distributive trade. In fact, it proposes to free the structure of the distributive trade and to resume after the war the position as it prevailed before by the right of re-entry.
When the President of the Board of Trade was expressing his view that he did not favour rationalisation to the extent of removing the small shopkeeper and leaving the distributive trades to the large departmental stores and the co-operative societies, he looked at me rather appealingly as if he hoped I would not contradict that point of view. It may relieve his mind to know that the Co-operative movement does not favour the freezing of the distributive trades in this way. It is a basic principle of our method of trading that it is not for the Government or the trade to settle these things, but for the consumer. It is for the citizens to decide whether they want to get their commodities from one trader or another. Therefore, we are with the President of the Board of Trade. We want the position to be open so that we can expand if the consumer desires us to expand. We have never tried to exclude anybody else from trade. All that we want is for people not to exclude us from trade.
My view is that after the war the position should be free for an extension of public and co-operative enterprise if the citizens of the country desire it. Therefore, I am against the form of freezing industry such as is embodied in the Report for it could easily develop into a kind of trade enclosure Act. We have had enough experience of enclosure in the history of this country in regard to 244 the limited amount of land and we have never escaped from the evil consequences of that limitation. Trade is a much bigger thing than land and I am not in favour of the form of economic Fascism that wants to tie trade down to the present limits. I hope after the war, through public opinion expressing itself in political ways, to see a considerable extension of public and cooperative enterprise. I should not, however, secure that by putting anybody into a straight jacket and trying to make economic development rigid in the form that is proposed in this Report. I should prefer it to come by the general development of education and the growing intelligence of public opinion.
My further case against freezing is this: I do not consider that Government or Parliament should clutter themselves up with obligations of this character. Parliament should certainly lay down standards—standards of employment, hygiene, quality and things of that description—and if traders cannot carry the obligations of a public standard they have no right to be in trade. The conforming to obligations of standards is an entirely different thing from what this Committee visualised in their Report. In my view it cannot be carried out by first of all trying to buy out the retailer and then trying to "kid" him that his place is secure after the war. That kind of thing will lead to disillusionment, breach of undertaking and contract after the war, and will increase public irritation. We know what happens after a war. It may be regrettable, but unfortunately it was our experience after the last war. When persons have been in the Services and have been hauled away from their businesses, with their gratuities or savings they afterwards want to find some outlet. If the Government or the system of the day cannot absorb those persons automatically, intelligently and immediately into the industrial system of the country, is anybody going to tell me that we are to close large avenues and opportunities of trade to ex-Service men by a process of this kind? It is building up a form of trouble that cannot be defended.
I would like the Government to clear up a point about the levy. The Prime Minister, I always feel, gave a clear indication of the division of opinion on this matter when we were considering the War Damage Act. The Government so far 245 have always steadily resisted accepting any obligation for personal loss, whether of business or of income or of occupation or profession, arising from the dislocation of the war. When we were considering the War Damage Bill which dealt with definite enemy action it was made clear that we could only consider compensation for war damage on the ground that it must not be the forerunner of compensation for all other types of personal loss arising from the war. In the Cooperative Movement we have made various efforts to establish a mutual aid scheme and other industries have tried to devise a method of mutual aid. The desire to assist is general throughout the trading community, but to stand any kind of success trades with limited identical interests must he grouped. If we pursued this line of compensation I am confident that the retail trades would have to be split into sections. Once they were grouped there would be a much greater prospect of success.
In the early days of the war, when some of the groups—the Co-operative, electrical and other groups—were anxious to devise some methed whereby they could come to each other's assistance if they were knocked out, the Chancellor would never give way on the question of Income Tax. The Committee in one of their paragraphs make it clear that the whole of their case stands or falls according to whether this levy is treated as a business expense. The Parliamentary Secretary ought to clear that point up. If the Government are not prepared to agree to this being a business expense, the Committee themselves apparently wash out the whole proposal. If the Government are prepared to treat it as a business expense we ought to know so that we can ascertain what are the technical differences which permit the Government to meet this proposal and not others.
The next point I wish to criticise is the voluntary character of this proposal. We leave it to individuals to decide whether it suits them to come out of industry or not, and the compensation given does not go to the individual at all. In most cases it will go to another person. This scheme is not really so much designed to assist the small shopkeeper as to assist the larger emporiums. Take the case of a big cooperative store or a large department store with a number of departments. As the 246 ranges of goods available for sale become more restricted under the policy of the Board of Trade a store may arrange to close certain parts of its premises and merge departments, with their reduced staffs into a smaller space. In large emporiums like Selfridge's and Barker's and our huge Co-operative central premises those problems would be decided on a business basis; but each of those concerns would be entitled to come upon the fund for compensation, and it might even be to their advantage to reduce their scale of operations. Further, their properties are almost invariably freehold, and so any contributions made to such concerns do not by-pass the actual traders. But most of the small shopkeepers, for whom sentiment is so readily aroused—not with any intention of helping them, but merely for the sake of playing to the gallery—rent their properties, and the 5 per cent. contribution will only cover the rent, or will only meet insurance payments, or the cost of maintaining the property and charges of that description.
This 5 per cent. contribution which the retail trade is expected to put up will bypass the small shopkeeper and pass into the possession of concerns which normally have considerable reserves. The big building society is not to-day an accumulation of small and poor investors but in the main is made up of investors who are reasonably well to do. Insurance companies, too, have very large reserves, and the owners of small shop properties of the kind we have in mind have as a rule no difficulty in reletting them.
§ Mr. Barnes
I should not agree with that at all. It is possible in many parts of the country to relet properties.
§ Mr. Barnes
I am not saying that the shops can be relet for exactly the same business purposes, but I am saying that with the decreasing volume of properties in the country there is no case for allowing the money from this fund to by-pass the shopkeeper and get into the hands of other commercial interests who are not 247 ostensibly included in this scheme at all. Under this scheme the retailer who remains in business will not pay the levy. He only becomes the tax collector, the agency for getting the money, because he will be able to pass this charge on to the public, on to his customers.
I ask the Committee to follow the sequence of my reasoning. When the Government have considered the general problem of citizens whose occupations have been affected by the war, people who have lost their professional incomes or have lost commercial positions through the war, they have always resisted their claims to any compensation. The Government adopted that position to protect the taxpayer, and having taken up that attitude I say the Government are not entitled to implement a scheme such as that we are now considering which will throw a burden upon the citizen in his capacity as a consumer. Hundreds of thousands, even millions, of people have been injured by the same processes as have affected retail shopkeepers without securing any compensation. I would give another instance of what has happened. When meat control was introduced 14,000 slaughter houses were shut down automatically and no compensation was paid. None of the persons who were employed in connection with those slaughter houses got any compensation and there was no appeal. If those 14,000 businesses could be closed down without any effort being made to meet the situation what case can be made out for meeting the claims of people who voluntarily withdraw from business? In my final word I would urge upon the Government and the Board of Trade that they should have no part in operating this scheme. If, as I have said, the Government are prepared to meet the point as to treating the levy as a business charge for taxation purposes, I think various groups of businesses may devise method's which will ease the impact of war conditions.
§ Mr. Linstead (Putney)
I have to ask for the indulgence which the House is usually ready to accord when a new Member addresses it for the first time. The business with which the Committee are concerned to-day is to see what can be done to help the independent businesses of this country, whether manufacturing 248 businesses or retail businesses, because I think it is becoming clear that all the forces which were operating in peace-time to put the small business out of action are being greatly accelerated by war-time conditions. It is a tendency which is almost unobserved and is extremely difficult to stop at any time, but it appears to me that the publication of the Report of this Committee does afford a particularly useful opportunity to examine this tendency. Whatever opinions may be held about the recommendations of the Report I think it will generally be agreed that the second and third Reports together do provide an extremely valuable social document, and we are indebted to the Committee for that part of the work which they have done. When we come to their recommendations, it seems to me that we have to balance one set of considerations against another. On what one might call the good side of the account not the least item, I should say, is the fact that they give an indication to the small business man that someone is concerned about his future, because that will mean something to him. Secondly, they do propose definite means of ameliorating his position. But when we have put these two considerations into one side of the balance, there is a great deal to be put into the opposite side, and previous speakers have indicated some of the difficulties which have to be faced. First of all, I am afraid that it is burial and not survival that is interesting this Committee. It is a great pity that the contributions which they propose in their scheme are to come from only one half of the retail trading community. If there is to be a benefit, why should half the trading community be deprived of it, and if there is a burden why should what one must assume to be the prosperous half of the trading community not help to share it?
I suggest that the scheme does not put the burden on the proper shoulders. It is called an insurance scheme. If it is so, the premiums ought to be paid by the people who are to benefit from it, and that means in this case that the premiums should be paid by the landlords, to whom it is proposed that the payments out shall go. We must recognise that the scheme is really a levy to reduce the number of retail outlets, in the interests of the community as a whole. Surely the community as a whole should take on its shoulders that burden if it is to benefit. 249 The smallest man of all, the under £1,000-a-year-turnover man, is given the opportunity of contracting out. It is very serious that the balance of the retail trade will certainly be altered if this scheme is put into operation. The small man will go out of business, and, at the end of a year or so, there will be proportionately a very much smaller number of small men. Finally, there is no certainty, in spite of the attempt the Committee have made to deal with the matter, that the small man can get back again immediately the war is over. He is given priority, but he may be at the tail of a very long line of people all clutching certificates of priority, which might not help at all. No one of these objections is fatal, but when you have six or seven of these objections altogether, it suggests to me that the scheme requires very careful examination by the trade, the Government and the House of Commons before it ought to be proceeded with.
It ought to be possible, as the hon. Member who has just spoken suggested, for arrangements to be made trade by trade, provided that there were at the back of them some statutory sanction. I do not think that hundreds of thousands of small traders will do very much if they are left to their own devices, because they are individuals. A good deal might be accomplished by arranging this matter trade by trade. I happen to know something of the retail drug trade. The President of the Board of Trade seemed to suggest that chemists wanted to be left out of this scheme for purely selfish reasons. I would remind the Committee that for two or three years there has been a committee advising the Ministry of Health and the Ministry of Labour and trying to keep chemists' shops open, in order to maintain an adequate pharmaceutical service, to the community. Our problem is slightly different from the problem of some other trades.
There are remedies outside the proposals of this Report. First, it would help enormously if the Board of Trade were to say clearly what the Government's policy is with regard to the number of retail outlets there should be. If they were to say: "We want, in a year's time, to have reduced the number of shops to 500,000," we might know where we were. There should be some plain direction to that end. If the Board of Trade, instead 250 of prescribing maximum prices were to prescribe fixed prices, something might be accomplished. Maximum prices induce the big man to undercut, in order to attract people to his shop. The little man cannot afford to do so. The Board of Trade could ease things a good deal for the small man, particularly for the small manufacturer in the matter of quotas and of retaining his staff. I have had a good deal of correspondence on the subject of the concentration of industry with one particular firm of manufacturers in Nottingham who have a special sort of leather which is of no use for anything except for the things they make They have a staff which works at home, immobile, the Ministry of Labour would call it, and they have warehouses which have been inspected and rejected as useless. There is no reason why they should not use up the stocks they have; but they are now threatened with the imposition of such a quota that they will be forced out of business. We are told that hard cases make bad law, but generosity in administration could ease the burden of the small man very substantially.
Finally, there is a great deal that the trader can do for himself. One of the most important is to provide some association which would enable the retail trades to speak with a fairly united voice to Members in this House. All Members have probably found themselves receiving confused advice on this subject. Surely the retail traders should get together and give us combined advice. In about a year ahead we shall find that the retail trade situation has considerably deteriorated. I can see no solution under Government control, except by one of two courses. They are, either concentration of the retail industry in a vertical line—manufacturer, wholesaler and retailer—or some form of registration and licensing which will reduce, pro rata, the small man, the co-operative society and the chain store, as the necessities of the war require. It may be said that the small business is not efficient, but I would be bitterly opposed to that suggestion. I have had plenty of evidence in correspondence which has reached me that some of the most efficient businesses are suffering seriously. Efficiency is not enough. If it is a case of small store versus the automatic machine, I am on the side of the small store. It represents an element of individuality in the community, and in 251 this House we should do everything we can to preserve it.
§ Viscount Hinchingbrooke (Dorset, Southern)
It is my very agreeable duty to congratulate on behalf of the Committee the hon. Member for Putney (Mr. Linstead) for his very able and informed speech. I think that what he said has had the complete sympathy of this Committee, and we look forward in the future to hearing him again on many occasions.
I desire to keep the attention of the Committee for only a very few minutes, as there are many other hon. Members who wish to speak, and I will confine what I have to say entirely to the question of retail trade. The third Report of the Committee, which is the chief subject for discussion to-day, has in my view certain sins, but they are sins of omission rather than of commission. The terms of reference of the Committee were very wide; I do not think that they have been quoted, and perhaps I might give them:To examine the present problems of the retail trade in goods other than food, having regard both to the immediate needs of the conduct of the war and to the position after the war, and to report.It is a fact, as the President of the Board of Trade has stated, that there is a great lack of statistics about retail trade, but this has been largely overcome by the Committee, and in my opinion the chief value of their deliberations has been in the provision of a comprehensive survey of trading conditions which the hon. Member for Putney has aptly referred to as a very valuable social document. They have, however, missed an opportunity in their recommendations, it seems to me. As I see it, the Government have a policy for the producer and also for the consumer, but no policy or plan hitherto for the middleman. The Committee has spent a year on its deliberations, and in that time it might have produced a plan or have advised the President of the Board of Trade on a plan for the distributive trade.
The trend of their investigations has been unfortunate. They accepted too readily the idea that the small trader must go under. As medical consultants to the patient, they have spent all their time with the undertaker and no time at all with the surgeon. We are not asking, and certainly the small traders are not asking, 252 for a decent burial. What they are asking for is an acknowledgment of the fact that their life is far from over, that they have much to give and much useful work to do. When the Government's plans come to be announced they will, I hope, include definite measures for maintaining the small trader in the distributive network on a basis proportionate to his position in that network before the war. I am not suggesting for a moment that he should be singled out for special preference above the chain stores, co-operative societies and so forth, nor that all his former rights and privileges should be retained unimpaired. We must recognise the secular trend in distribution which has been operating over a long period. But neither do I suggest that this war gives or ought to give our eager socialist planners an excellent opportunity for securing the early demise of the small trader.
The problem is, like many problems, very simple in essence but difficult to overcome in practice. Broadly speaking, there is an ascertainable production and an ascertainable consumption which is gradually stabilising, because of limitation of supplies, rationing and so on. There is a distributive and a selling force organised on the basis of pre-war conditions, subjected to heavy withdrawals of labour and very badly in need of overhaul to meet the conditions in which the flow of products has dried up to the extent of 50 per cent., or 75 per cent. Ideally speaking then, the problem is to cut down retail trade to meet this situation so that neither the small trader nor the co-operative store, nor the chain store, nor the big department store is left in an advantageous position the one against the other. The Committee on Retail Trade has failed altogether to suggest machinery for this, and it is now up to the President of the Board of Trade. It must be acknowledged that to the extent that he does not succeed in securing this equitable basis he will in the nature of things be accused of political bias one way or the other. It was, however, refreshing to hear him refer in friendly terms to-day to the small trader, and in stating the Government's policy as announced by the present Minister of Production some time ago, I think it is quite clear that the Government's intentions are, broadly speaking, to keep the present balance as it is to-day.
253 It should not be impossible to set up machinery on a regional basis to relate the available goods in an area to the purchasing power in that area. The President spoke to-day, when considering the organisation of the clothing industry, of treating that matter on a regional basis and of using certain designated firms and grouping industries around them. I know that the Ministry of Food is also planning its work more and more on a regional basis. Could we not have something of that sort in the distributive and selling trade? It should not be impossible to secure a contraction of distribution and of selling agencies of all types to meet the present flow of trade, with compensation found from within the trade for those who are obliged to leave it. Some scheme on those lines would, I think, help the traders immensely. At the present time small traders do not know what to do. They are subjected to economic winds of uncertain direction and force blowing about their doors; they do not know whether to remain inside and go upstairs and die or whether to go out and fight against those winds. They need Government advice because they are not aware of whether they are helping the war effort by remaining in their trades or by voluntarily closing down. Until that is made clear to them, how can they know how to act? The third Report does provide a plan to aid the small trader to overcome his difficulties once it has been decided that he should close down, and I make no complaints about the Report from that side. It seems entirely workable. I would like to see it included in toto in the recommendations which the President will have to make.
We hear remarks about the small trader being the backbone of the country. So he is, and so indeed is anybody, any group of interests which caters for an essential war-time need. It is no use to say that this or that section of the community is the backbone of the nation and that all its rights and privileges must be upheld regardless of what happens to others. What has to be said and what has to be ensured, as far as possible, is that all sections should have those rights and privileges curtailed in equal measure so that we end this war, not with our trading system transformed into a mould foreign to its nature, but with that nucleus remaining which is fully representative of all that is best in our national 254 life in time of peace, a nucleus which will bud and blossom forth again in happier days and restore to us that freedom and scope for individual and collective enterprise which are our heritage.
§ Mr. Leslie (Sedgefield)
The trend of the discussion to-day inclines me to express sympathy with the President of the Board of Trade. His is no light task with so many complicated interests to consider. The Report of the Retail Trade Committee is a case in point. In this connection I think the President has been wise in asking traders and others concerned to present their views before coming to a final decision, because he will find that there is a very considerable amount of prejudice and misunderstanding to overcome. The work of this Committee deserves our appreciation and thanks. It was no light task for that Committee to undertake. I wish personally to congratulate them on their Report. It is a constructive document that merits our careful consideration. The Report contains a basis of a planned economy of distribution, something which is decidedly essential, and something which is long overdue. For many years I have advocated a system of licensing for the distributive trades in order to protect the bona fide trader and at the same time the assistant whose livelihood is at stake. The distributive trades have for far too long been the hunting ground of the failures of other occupations, and of cut-price swindlers running shops on sweated labour, and very often on stolen goods. Many decent, honest men have been driven out of business by these interlopers who have opposed every effort to improve conditions. They were the great obstacle to early closing and the restriction of Sunday trading.
There is no denying the fact that there were far too many shops in pre-war days, and the need for a licensing system was obvious. I am glad that the Report emphasises this aspect of the case. On that very point it says:There is a growing admission as evidenced by numerous statements made to us that in peace time there has been on all sides too indiscriminate an opening of shops, and that this has led, particularly at the fringes, to uneconomic types of trading and to malpractices. This factor has undoubtedly aggravated the war-time problems with which the trades are 255 faced and it will engage our later attention for the post-war period. In so far as any present remedies for meeting the war-time emergency begin to produce more order, they will of themselves help to lay a sounder foundation for the future.That is what the Committee's Report has endeavoured to do. The scheme outlined will, as the Report says, afford small traders who have been hard hit since the war both a present relief and a sound hope of post-war recovery unburdened by debt. If things are left as they are without such a scheme as that proposed in the Report, one of two things will be the result—many small traders will go to the wall without any compensation of any kind, or else, if they strive to exist on a diminishing volume of goods, there will be a demand for a larger margin of profit. Overhead charges remain, and having less to sell the trader, if he is to pay his way and give fair wages, must demand larger profits. That is obvious.
The blunt truth is that there exists a number of small traders who are economically unnecessary for the distribution of available goods, however sympathetic one may feel towards these helpless victims of the competitive system, accentuated as it has been by war conditions. The Committee have done their best to formulate a policy and scheme to relieve the situation. In their Report they are not unmindful of the future of these small traders who may give up business during the war. Their right of re-entry is safeguarded, and a certificate to this effect is provided for. Coming to the minority Report of one individual, I can quite understand the unfortunate position of that individual, compelled to disagree with his colleagues. But what does it mean? In fact it means that he would continue the competitive system—no restriction on the right of traders to open shops when they like, where they like, how they like, and to sell what they like. After many years of careful study of the distributive trades I am thoroughly convinced that the registration and licensing of shops are absolutely essential in a planned economy, essential in the interests of traders themselves, essential in the interests of assistants, and essential in the interests of the consuming public.
§ Mr. Colegate (The Wrekin)
In the very short time which the Co-operative movement leaves for private industry to speak 256 I wish to raise one or two points regarding the speech of my right hon. Friend the President of the Board of Trade. It was of the usual suave type, and painted a picture of the concentration of industry proceeding smoothly and efficiently. I feel that I am perhaps being a little unfair in having to break up that picture. As a matter of fact the concentration, as we call it, of industry has brought about a number of very serious difficulties, and while I agree that on the whole a good deal of good has been done, it must be recognised there has not been sufficient forethought in the Board of Trade about these concentration of industries schemes. The case of the pottery industry is well known. An attempt was made to close it down too soon. It has now had, in effect, to be reopened to a large extent. The same thing has happened in other industries. An industry in which I am concerned, the bicycle industry, has to some extent been the subject of the same treatment. I think the scheme has now been withdrawn, but even now there is not sufficient appreciation on the part of those Departments concerned that the reduction or the abolition of the basic petrol allowance, and the great strain being put upon all forms of transport, has made the bicycle industry an essential industry so far as the war workers of this country are concerned. Without it large masses of them cannot get to and from their work, and yet at the moment it is impossible in many districts to get spare parts for bicycles.
The Board of Trade should look further ahead than they do at present, and consider not only whether an industry is required at the moment, but what will be the effect upon it of shutting down some other industry. Let me give an illustration of some of the injustices which are caused by this policy of concentration of industry. This is a case which came to my own notice. A manufacturer in an industry which was concentrated very early on, was asked by the Ministry of Supply to undertake war contracts. He did so, and got the whole of the factory on to war work, except for that part of it which had been leased to the Admiralty, at the Admiralty's request. The result was that his firm was not allowed to become a nucleus firm in its industry. The War Office, having got, through the Ministry of Supply, enough of the goods supplied by that factory, are stopping the 257 contracts. The manufacturer said, "To assist the Government, I undertook those contracts, and I will now go back into the concentration scheme." The Board of Trade said, "Not only will we not allow you to become an essential part of the concentration scheme, but we will allow you no materials, and you must shut up your business." I shall be pleased to give my right hon. Friend the name and address and details of the firm, if he will consider the matter.
A great deal too much importance is attached to the idea that anything which is bigger is better. That is totally untrue. The Ministry of Supply can tell you that, in engineering, some of the most efficient firmes are found amongst the small firms. I am, fortunately, married, and I have not to do the shopping, but, in any shopping that I have done, I have invariably found that, the smaller a firm is, the more efficient it is. Nothing can exceed the inefficiency of the large chain stores. In the rural districts, the cooperative societies do not bother to serve a district which is below a certain size; and, therefore, in the country we are accustomed to much better service than is given in the chain stores, where they adopt an attitude of "take it or leave it." At times the co-operative societies and other large concerns appear to exercise a somewhat unfortunate influence. I have had experience recently of one new-scheme which was started for war industries in this country, where it was necessary for the new community created to provide a shopping system. The experience of the committee set up to deal with the question of whether commissions should or should not be given to certain shops, was that the matter was referred to the local co-operative society.
§ Mr. Colegate
I can give the name of the place to my right hon. Friend the President of the Board of Trade.
§ Mr. Colegate
Very well; it was at Donnington, the largest housing scheme in the country at present. The committee found, to their horror, that the question of allocating the shops in that large new town which was to be built was referred to the co-operative society. That seems entirely 258 wrong. [Interruption.] I am glad that the hon. Member agrees with me.
§ Mr. Colegate
That should be stopped, and the only body that can stop it is the House of Commons. I hope the House will impress upon the Government that, without too much sitting on the fence, without too much balancing of this consideration against that, they should bring forward a scheme to provide for the small shopkeeper, who has served some of us so well.
§ Mrs. Adamson (Dartford)
It is not my intention to discuss the Report of the Retail Trade Committee, because the Government have not yet made up their mind as to the recommendations. I will confine my remarks to the question of utility production, particularly to the points of view put to me by the housewives of this country. The right hon. Gentleman the President of the Board of Trade referred to utility clothing and boots and shoes. I want to make some observations on that subject, and on perambulators. There are two sections of the population who are deeply interested in the question of furniture. They are the bombed-out families and the couples who intend to get married. They tell me that when you go round the shops, whether the large shops or the small shops, you find that the stocks of furniture are very small, that the prices are outrageously high, and that the quality is shoddy. I was interested when the right hon. Gentleman spoke about utility furniture, but I have not yet seen any in the shops, and I have not yet had a report from anyone who has been able to buy it.
I was interested in the statement that he has set up an Advisory Committee of experts and practical people, including a humble housewife. I hope that, as a result of their recommendations, he will make as big a success of utility furniture as he has done of utility clothing. I hope that stocks of utility furniture will be forthcoming at a very early date, and that there will be simplicity of design, with strictly controlled prices, and that it will be of good material, pleasant to the eye, as well as durable. I trust that my right hon. Friend will bear in mind that there will be a big demand immediately, and that, also, we have to look to the future, because when the war is over, and our 259 men come back, there will be a high marriage rate, and those people will not be very patient if they cannot get the furniture to set up their homes. I trust that the right hon. Gentleman will take immediate action to secure "supplies, and that he will also look to the future. I want to speak about perambulators. I have a letter here which, with the permission of the Committee, I will take the liberty of reading. It came on the 17th of this month from one of my constituents. She says:Dear Madam,—I feel I must write to you as I know what an interest you take in all the problems that confront housewives and mothers in your district. I am not writing on behalf of myself alone but for all expectant mothers. I am expecting my first baby and am naturally very pleased about it, but since … I have realised what an uphill struggle it is to even get the bare necessities for a baby. For instance, surely something could be done to control the prices of prams and cots, etc. I have been trying for a pram to-day and I find that the same model that a few months ago would cost £6 now costs £13 5s., and apart from the price, the quality is so poor, and one of the most essential things (the brake) is now being omitted.It seems very unfair that there is so little being done for the young mothers, when our Government is always telling us it is our duty to carry on having babies.She goes on to say:It is very sad to hear the expectant mothers … worrying and wondering how they are going to provide for their baby, especially Servicemen's wives. I know you will understand the difficulties as you are a mother yourself, and I thought perhaps you would be able to raise this question in the House and perhaps get something done.I think my constituent has hit the nail on the head and put the problem in a nutshell. Perambulators are a necessity, particularly in districts where you have young married couples going in for families, and they are not only a necessity but a means of transport. They are a necessity to the mother when she goes shopping, and, more important still, the young and intelligent mother of to-day uses the perambulator as a means of putting the baby to sleep in the open air. It is a bad thing for a young mother to have to carry a heavy baby, and it is bad for the baby. I also appreciate the fact that the materials used in the construction of perambulators may be materials which can also be usefully employed in the manufacture of munitions. But I am going to appeal to the romantic 260 and sentimental side of the President of the Board of Trade and ask that something tangible may be done to help the young mothers of our country at the present time in regard to what I would call a priority problem of utility production.
I want to make a few observations about utility boots and shoes. I have not yet had the pleasure or necessity to buy any utility boots and shoes, but I believe that they are not yet in the shops in substantial quantities. I believe that there is a wide range of different styles, from women's walking shoes to babies' sandals. I am very pleased that the Board of Trade has eliminated the nasty, cheap, shoddy shoe and has made it possible for ordinary folk to get a good and pleasing design at a popular price. I ask that special attention should be given to this problem so that we can get available supplies.
I will conclude by making a reference to utility clothing. I congratulate the President of the Board of Trade, his predecessor and his Department on the fine job that they have done in regard to the production of utility clothing. It was introduced about a year ago, and it certainly has, as my right hon. Friend said, checked the rise in prices of clothing, which like everything else were soaring and making it almost impossible for ordinary people to be able to buy useful clothing. I attended an exhibition of utility cloth at which there were buyers and representatives of the trade. I was delighted with the wide range of cloths available for ladies' dresses and costumes and for the needs of children. I spoke to a buyer in the woollen trade, and he gave me his candid opinion about the utility clothing. He told me that it was the best value ever offered to the British public for a long number of years and that the public were certainly protected to the hilt because they got good durable clothing at a reasonable price. And not only that. We all know that famous dress designers have co-operated with the manufacturers and the Board of Trade in order to make utility clothing available to people of ordinary means. I myself have a utility dress. It was designed by a famous dress designer, and yet as an ordinary woman in Great Britain I can get this at a price which is very reasonable and well within the pocket of the ordinary working-class 261 woman. If utility dresses are good enough for me in which to come to the House of Commons they ought to be good enough for everybody else.
I want to pay a warm tribute to the Board of Trade. We are always criticising Government Departments, and rightly so, when there is room for just complaint, but when the Board of Trade or any other Government Department do a useful piece of work in the way that the Board of Trade have done for utility clothing, it is only right that we should express our appreciation in this Committee and the hope that they will extend their sphere of operations as successfully in other directions. I want to emphasise the point made by my hon. Friend the Member for East Ham, South (Mr. Barnes) in regard to high prices for household linen. That is a sphere to which the Department might usefully direct their attention. It is impossible for housewives at the present time to replenish stocks of household linen at a reasonable price. The quality is not too good and the prices are too high. Although the Government say that we ought to spend less, unfortunately the housewife has to replenish her stocks in order to carry on her work.
§ Mrs. Tate (Frome)
I am sure the Committee will sympathise with me in the difficulty in which I find myself in being the only member of the Retail Trade Committee who is also a member of this House. It is naturally my wish to present the Report of the Committee in as favourable a light as possible, and I only wish that other members of that Committee whose ability and experience far exceed my own could address this Committee in my place. I listened with very great attention to the speech of the President of the Board of Trade, and I am sure that all of us sympathise with him in the very great problems with which he has to deal and in the immense complexity of those problems. His speech to-day was certainly directed towards giving pleasure to all sections of the retail trade. But I am not so certain whether it will be possible to fulfil the expectations to which he gave rise. The Retail Trade Committee's Report was unfavourably received in some quarters, and I think that was so for two reasons. First, it did present hard and unpalatable facts, facts which are inescapable because they are the result of war, which produces difficult, inequitable and wretched condi- 262 tions. Second, as I think other Members have said, the retail trade is not too well able to make its voice heard. There is no doubt that although there are bodies representing the small trader, the small trader himself finds it difficult to study a Report such as the third intermediate Report of the Retail Trade Committee and still more difficult to make his voice known to his organisation to which, unfortunately, many do not belong, for one reason or another. When the Report was first brought out there were large headlines in the newspapers which gave the impression to the small trader that it was the wish of that Committee that he should be swept away by compulsory means and that if he wished to remain in trade he would have to fight for his existence. That is not the case; there is not one line in the Committee's Report which suggests or advocates compulsory closing. It is left entirely to the discretion and wish of the small trader himself. Having heard several rather severe criticisms of our Report, may I say that I deeply appreciated the kind reference made to it by the hon. Member for Sedgefield (Mr. Leslie) and his support.
The sympathy of the Committee and of the country has been aroused in favour of the small trader, and that is very natural, because the small trader who maintains his existence to-day is a man who has his roots and traditions in the trade. These traders—men and women—of experience have built up their trade by years of hard work, with real knowledge, initiative and enterprise. The little trader who had no knowledge of trading has been swept away as a result of the war, and the small trader who remains today is a man of real value not only to the retail trade but to the community, and I am desirous of helping to see he survives. The President of the Board of Trade has told us that it was his wish as it was the declared wish of his predecessor, to maintain the present balance of trade as between one trader and another. I would be far happier about the condition of the retail trade if I believed that that could, in fact, be done, but the President on his own showing—and he referred to table 9 at the end of our Report—agrees that the balance has already been upset. The trader who has been most severely hit by the impact of war is the small trader. It is true that in a large number of cases 263 departmental stores have suffered, but in the main that has been the result of the blitz. The impact and difficulties of war have largely hit the small trader, and I fail to understand—unless the President intends to impose some compulsory measure of closing upon large departmental, co-operative and multiple stores immediately—how on earth he will maintain the balance of trade. If he intends to do that, he intends to go far further than I or any other member of the Committee would have dared suggest and certainly much further than it was suggested we should go if there was to be any hope of a unanimous Report.
§ Mr. Lipson (Cheltenham)
Is my hon. Friend aware that in the opinion of many traders this could be done by a more equitable distribution of certain supplies, as they are available?
§ Mrs. Tate
Perhaps my hon. Friend will allow me to develop my speech. I intend, of course, to deal with the distribution of supplies. There are two methods of expressing sympathy with the small trader. You can endeavour to find some means of underpinning and safeguarding his position, or you can express glorious hopes which you have no hope whatever of being able to implement. It would be very easy in my Division to express sympathy with the small trader and to say that he must not be allowed to disappear. I would like to say that; I do not want to see him disappear. I want to see his position safeguarded and maintained, but I prefer to assist him by facing the truth, which is hard and unpalatable because, as I have said, conditions imposed by war are hard and difficult. There are three main difficulties which the retailer has to face. One is lack of supplies, another is lack of labour, and the third is the severe control of price margins.
Let me deal first of all with the shortage of supplies. When the President referred to this question in his speech he told us how he had been obliged to concentrate industry and suppliers and to limit supplies. He said that that was part of his policy. We have only to think for one moment to appreciate that the inevitable result of war must be an enormous contraction of supplies. If there is concentration of manufacturers and of industry there must inevitably follow a certain 264 concentration of the retail trade. It cannot be avoided, however much you may regret it. Now we come to the distribution of supplies. I should be the first to admit, representing as I do an area which, in some parts, has been a reception area and, in other parts, an evacuation area, that there has not been equality of distribution of supplies.
I say that equality of distribution of supplies is an almost insoluble problem, because if it were solved for to-day, tomorrow there would be inequality again, because of the shift of the population. But suppose that we arrive at a point when we have absolutely fair distribution of supplies, is there any hon. Member who will tell me that an equal distribution of much too little will enable a trader to trade at a profit? If there is an equal distribution of too little, there is only one way in which a trader can trade at a profit, and that is if he is permitted to charge so high a price for his goods that he is able to pay his overhead charges no matter how few goods he sells. Therefore, hon. Members have to face that problem and acknowledge that difficulty. We cannot solve the problem by equal distribution of supplies, desirable though equal distribution of supplies is. Therefore, I come back to the fact that, much as we may dislike it, some concentration of the retail outlets is inevitable if we have limitation of supplies and concentration of manufacturers and supplies.
§ Vice-Admiral Taylor
With regard to the distribution of supplies, the argument has been put forward that, as the position is at present, equal distribution of supplies would be impracticable, but suppose that the scheme of the Committee were introduced and the retailer voluntarily went out of business, does the hon. Lady maintain that after that had come into operation it would still be impossible to have a fair distribution of supplies?
§ Mrs. Tate
I said that equal distribution, if it could be arrived at, is desirable, but that it would not enable the number of traders who are trading at present to remain in trade. If my hon. and gallant Friend does not mind, I will come later to the point he has raised. I come now to the main recommendations of the Committtee's Report. One of the recommendations of the Comittee—it was a recommendation upheld by every Member of 265 the Committee, and I think I am right in saying that most of us would not have signed the Report unless it had been a condition—was that the compulsory levy to be made on those remaining in trade should be a business expense both for taxation purposes and for every other purpose. The President of the Board of Trade said that when it was a question of its being an allowable expense for taxation purposes, it was comparatively simple, but that when it came to affecting the Prices of Goods Act, it was a very difficult problem, because it would raise the prices of the goods to the consumer. I think I have stated correctly what the right hon. Gentleman said. But I would like to assure him that, after very great consideration, the Committee came to the conclusion that that would not at all be the case, for the following reason. If there is a lesser number of traders trading, they can trade more economically. For instance, suppose that you have £1,000 worth of goods which you wish to sell. If they are in the hands of one trader, he may be able to sell them, pay his overhead charges and make a profit; but if there are £1,000 worth of goods in the hands of 100 traders, each one of them will sell the goods at a loss and not be able to pay his overhead charges. One of the arguments in favour of concentration is that it will enable the traders remaining in trade to have a larger supply of goods and sell at a more reasonable figure. Therefore, I think the Committee was perfectly justified in saying that this should be an allowable expense not only for taxation purposes but also for the purpose of the Prices of Goods Act. I hope the President of the Board of Trade will reconsider that point, because it is a practical one.
Hon. Members have said that a scheme like this would be very practicable and very attractive if it were confined to certain trades—if, for instance, the chemists were allowed to make a scheme of their own and deal with their own problems, and the tobacconists the same. But do hon. Members appreciate that if the prosperous trades are allowed to make a scheme for themselves, their commitments will be very small? If sectional schemes are allowed, an absolutely impossible burden will be imposed on those sections of the trade which are the most hard hit. In fact, it would be impossible for them to meet the levy. No friend of the small 266 trader could really advocate that scheme if he would give it really serious consideration. There is only one possible way of working any compensation scheme, and that is that the fortunate should help the less fortunate. That is not a new proposal; it by no means initiates something that is new. In regard to this matter, I was very deeply shocked to read in to-day's issue of the "Daily Mail" that 1,000 Northumberland and Durham confectioners, after a meeting, telegraphed all local Members of Parliament requesting strong opposition to the Report in Parliament, because, they said:Small traders bitterly oppose the scheme, as unjust in principle, to tax any section of the community for the benefit of another section.Surely, the Unemployment Insurance Scheme taxes a certain section of the community for the benefit of another section which is less fortunate. Surely, the Commodities Insurance Scheme and the War Damage Act do the same thing. I think that if this is the only ground on which these people can oppose the Report, we may be satisfied that we did a good job of work. There is also a suggestion that the percentage of the levy is too high. It was impossible for the Committee to discover what sum would indeed meet the case, and we merely put forward tentative suggestions, but one thing of which I warn hon. Members—and I cannot sufficiently impress it upon them—is that each day that passes makes the position of the small trader more precarious. Whatever else you can afford to do, you cannot afford to go on doing nothing. The whole of our Report and the figures put forward in that Report were based on the belief that something would be done in the near future. Every day which passes means that the turnover of traders is growing less and that the levy which would be imposed on those remaining in trade would have to be at a higher level.
Hon. Members have also criticised the Report because it is a funeral benefit and does nothing to maintain the small trader in business. I have tried to show the Committee that a certain amount of concentration of the retail trade is inevitable, and I fail to understand how this can be described as a funeral benefit, because, if this scheme were implemented to-day, it would allow the trader, whose contractual liabilities would be met, to cease trade 267 now that conditions are so difficult and leave his business with such capital as he has absolutely intact. I have never understood that you were able to take your capital with you when you are buried, and I hope, therefore, that that rather inept simile will not again be produced. I have also heard it said, and this is the criticism of the Minority Report, that this is only putting money into the pockets of the landlords. Does the Committee appreciate that the landlord is entitled to his rent at the present time, and that the small trader and any trader is under an obligation to pay that rent? The landlord is getting his rent, whether he gets it from the trader or from a compensation fund. We have expressly said that no trader who goes out may renew his contractual liabilities when they come to an end. For instance, if his lease comes to an end, he cannot renew it, because that would be putting money into the hands of the landlord. All our scheme suggests is that the landlord should be paid by traders, who are able to trade at a profit, the sums of money which at present he is getting from the little trader who is having to use his capital with which to pay that rent. If anyone can prove to me that that is putting money into the hands of the landlord, I shall indeed be impressed by his ingenuity.
There has also been the suggestion, and this came from many branches of traders, that this scheme was unjust and impracticable because it did not include the food trades. As hon. Members know, we were not allowed to consider the food trades, and I would not commit myself on this line, because, having for 14 months studied this question in all its immense complexities, I feel that I cannot recommend the inclusion of the food trades unless I had studied the problem. The one thing I beg of the Committee is, if hon. Members feel there is a strong case, and there may well be a strong case for the inclusion of the food trades, to press upon the President, and they believe our scheme is a practical one, to implement it at once without waiting to include the food trades, because the Committee must appreciate, if they press for the inclusion of the food traders, we shall have to deal not only with the President of the Board of Trade but with the Minister of Food, and, if there is one thing which is more calculated to delay anything being done, it is to allow 268 Ministers to argue among themselves. I do not wish to take up the time of the Committee, but, as one who has always had a deep interest in the small trader, an interest and regard which was enormously increased the more I studied the retail trade, I implore hon. Members, whatever they think of our Report, unless they can immediately bring forward some more practical scheme—and I wish from the bottom of my heart that they could do so—unless they can do that, not to be divided among themselves, but to insist that the President of the Board of Trade shall act, and act quickly.
§ Lieutenant Butcher (Holland with Boston)
I think the Committee will have listened with great interest to the hon. Lady the Member for Frome (Mrs. Tate), and appreciates not only the great care and thought which she has devoted to this matter, but the bright advocacy she has given to the conclusions of the Committee, to which I am sure the President of the Board of Trade will give his most careful consideration. I think my right hon. Friend is to be congratulated on the very fair survey he made of the problems which concern his Department. He has the very unenviable task of stripping out of the civilian economy all the labour, all the material and all the premises he possibly can. Apart from the housewife, he has under his purview the main reservoir of labour, excluding the Civil Service, which is not directly concerned with the war. He was, I think, right in directing himself to the freeing of labour and material for the war effort. I ask him to realise that many of the difficulties with which he finds himself confronted would not have reached their present stage had the Department dealt with them a little more speedily in the early days.
The record of his Department is not very satisfactory in dealing with the concentration of industry, the terms of manufacture and the terms of distribution. Let me give the Committee an experience I had in the Midlands not so very long ago. I was at a large manufacturing concern which was making small arms ammunition. We were told that a number of vacancies existed for women of any age, preferably young women. Despite the enormous exertions of the Ministry of Labour, they could not get sufficient women. The very next day I had to speak at a chain store, and over 100 269 people of the type desired by this factory were engaged by a private business within a stone's throw of their premises. This notice was hanging in the window:Owing to the shortage of supplies, these premises will be closed all day Tuesday and all day Thursday, until further notice.The Minister has to maintain sufficient retail output, and that is perfectly right, but he also has to do the converse and suppress, so far as he can, all unnecessary output. In fairness to old-established businesses, I ask him to consider again what has already been urged upon his Department, namely, to go back to pre-war days and examine what the position was at that time, and whether it is not possible to cause certain traders to confine themselves to the activities upon which they were engaged at the outbreak of war. He pointed out that it is his duty to free labour, and, of course, he is perfectly right. I was glad to hear him say he is re-examining the possibility of recruiting labour wherever it may be for the war effort, but the converse also applies, that all the labour left inside retail distribution must be as fully used as possible for the purposes of the war.
Again, he showed great understanding of the problems of the rural areas. We who represent the countryside are not really getting our fair share of normal consumable goods. I am grateful to him for promising to give his attention to the problem of distribution. I know that the difficulties are enormous, but they have to be faced and overcome. Having given the manufacturer a quota, they have not given him any direction as to how he is to distribute. I think the President might well consider requiring the manufacturer to divide his pre-war manufacture into categories of distribution, whether chain stores, private traders or multiple shops, whatever it may be, and then equate his war-time manufacture within those same proportions. I believe he would then be able, inside those limits, to distribute goods in accordance with the variations of population. I will not comment now on the Report of the Committee. I am sure the hon. Lady was perfectly right in pointing out that there has to be still more sacrifice and hardship endured by retail traders. On the other hand, I should not like to see too heavy a machinery set up—compulsory levy or 270 licensing—until the right hon. Gentleman has thoroughly exhausted every other possibility.
§ Mr. Spearman (Scarborough and Whitby)
I was delighted to hear the President of the Board of Trade express sympathy with the small trader, but I should like to have seen more indications that he was going to translate that into practice. I think there should be some financial assistance from the State to compensate the small trader. Owing to the war, the Government have very properly had to curtail supplies and this is likely to become much more severe in the near future. Also very properly under the circumstances the trader has been restricted from using his natural remedy of raising prices, and I should like to suggest that the Government should make a contribution and relieve traders who wish to withdraw from business of their contractual obligations for rent or mortgage interest. As the landlord in that case would be getting better security, it is reasonable that he should obtain a lower yield. I therefore suggest that he should only receive, say, 75 per cent. of his ordinary rent. I understand that there are about 650,000 traders and that the average rent is somewhere about £100 a year. If one in five traders withdrew, that would entail a cost to the Government of about £9,000,000. In actual fact the Government could make use of a large number of those shops for storage purposes and for offices, which they are continually requiring. Therefore the actual cost would only be a fraction of that amount. At this time many of us hesitate to urge the Government to spend money even for the most desirable social services because we fear inflation. In this case, however, there would be no inflationary effect at all. In fact the very reverse is the case, because there would be an increase in supplies through a saving of fuel and light and a diversion of labour to productive purposes.
Therefore I ask the Government to relieve the small trader who wishes to go out of business of his obligations in tire way of rent which would enable the fund obtainable from the levy to be used for two purposes—to provide a livelihood for some of those old people in shops, who may well become destitute, because after 60 or 65 it may be very difficult for them to obtain other work; and secondly for 271 the young people, who of course will be able in these days easily to obtain other work, to set an annual sum which they will have the opportunity of accumulating so that they can after the war reopen in business. They will of course be at a great disadvantage compared with their competitors who have remained in business all the time, and retained their goodwill, but they will have this compensation to enable them to reopen. If this levy system takes place I ask that the allocations should be graded so that a larger percentage on his turnover shall be paid to the small man who needs it most; and, secondly, that it should be compulsory only for those whose turnover is over £2,500, which would save a great deal of office work and relieve the small trader of the burden of filling in more forms and further regulations, which are so injurious to him. In conclusion, I would make an appeal to the President of the Board of Trade that, not only in the cause of justice but as a matter of expediency, he should take steps which would enable such a very deserving section of the community to preserve themselves.
§ Mr. Rhys Davies (Westhoughton)
I have tried to follow the problems of the retail trade for many years. I had the privilege once of sitting on a Select Committee which dealt with a kindred problem many years ago. I join with the hon. Member for Sedgefield (Mr. Leslie) in congratulating the Retail Trade Committee on probing into what is almost the unknown. It is well that the House of Commons should on occasion be brought face to face with this colossal retail trade, the largest single industry in the land. The Board of Trade have to be congratulated on asking the opinion of Parliament on these proposals before they try to implement them. I am sure that the Board will be wiser after this Debate than they were before. I have asked the Government over and over again to follow what is done in other countries and to take a census of retail distribution. Every pound of coal, every yard of cloth, every bag of potatoes taken to the market is known to Government Departments, but hardly anybody knows anything about this enormous industry of buying and selling. If the hon. Lady the Member for Frome (Mrs. Tate) does not mind me saying so, the labour of this Committee is 272 nearly all guesswork about the retail trade. I am not blaming the Committee for that, because nobody in the country knows the size of the problem. The nearest that can be got to it is to consider the number of persons employed.
I do not think that the Board of Trade will be able very soon to come to a decision on the recommendations of this Committee. The tragedy about this business is that three years of war have passed and nothing has been done. Is it not too late already to do anything? The hon. Lady the Member for Frome shakes her head. If the war lasts another three or four years the work of the Committee and their recommendations will be worthy of consideration, but I should imagine that more small traders have gone out of business already than the number who would go out if these recommendations were implemented.
§ Mr. Davies
That is not the experience of this country in the past. Our experience is that after a war the manufacture of pots and pans grows enormously and the retail trade is well away before the export trade gets a start. I am pleased as a trade unionist that mention is made by the Committee of the necessity for establishing a proper wage scale and proper conditions of employment in the retail trade. [Interruption.] If the hon. Ladies opposite interrupt my speech, it will be much longer than I intended it to be. If they will remain silent, I will close my speech earlier, but that is difficult for both of them. We are dealing with the non-food trades and the House of Commons must face the fact that these people have had a very raw deal from the community. I do not know anything more catastrophic in the history of the war than the position of the small shopkeepers. I put a question to the hon. Member who spoke for the Liberal party when he suggested that the State should enter into retail distribution. I have no objection to that except that as a Socialist I would prefer the municipalities to deal with some of the retail distribution instead of the State.
273 It does not matter what Parliament wishes to do or what system of registration or licences there is, when the war is ended and thousands of men come back from the Forces, some of them wounded, some with a small pension, nobody will employ them in industry, and Parliament at one fell swoop will disregard all Regulations and allow them to open little shops everywhere. That is exactly what will happen, and it is no use Parliament making promises of any kind about registration and licences. Some people talk about planning retail distribution, but when I hear a person talking about planning I am always afraid that he has the elements of a dictator in him. Show me a planner, and I will show you a dictator. The small shopkeeper is gradually going by the board owing to two processes that are taking place. One is the Co-operative movement, which is growing by leaps and bounds every year and the other is the chain stores and multiple shops, which are expanding. The hon. Gentleman who opened the Debate on this side of the Committee was right. People do not go to small shops because they are small shops. Women go to the emporia and spend half a day to look at things and then come out without buying anything. The problem, in spite of all the President of the Board of Trade will promise, will be settled of its own volition. I would ask the Board of Trade when they deal with this problem to remember above all things that promises made during wartime will never be able to be implemented when the war is over.
§ Sir Percy Harris (Bethnal Green, South-West)
I think it can be agreed that in this Debate we have seen Parliament at its best. The various interests concerned can feel that their points of view have been put forward to this Committee. I should like to congratulate the President of the Board of Trade on the amount of study, thought and time that he has obviously put into this problem. He was wise, I feel, to wait for this opportunity to hear all the different points of view, because the last thing we want is a Minister exercising autocratic powers unless he feels quite sure that he has behind him the feeling of the country as expressed in Parliament. I should also like to congratulate the hon. Lady the Member for Frome (Mrs. Tate) on her association with this most valuable Report and 274 indeed with all three. Reports, which are a most valuable contribution to our knowledge on this subject, and to congratulate her also upon her speech, which gave a personal and human touch to the dry and dusty words of the third Report.
For a long time before the war the small trader was getting a rough time. The competition of the multiple shops, the department stores and the Co-operative movement was being felt by all independent traders. In many cases we have seen their shutters go up, shops change hands and traders appear in the Bankruptcy Court, and under war conditions the chances of survival must obviously become less and less. We must not forget, also, the shopkeepers who have already been called up for service. Many of them have already lost their businesses through going into the Army, and there is no provision here for them. That process must go on as the age-limit is raised and as the different classes are called up. I believe that Parliament and the State have a responsibility to see that no injustice is done to them.
I do not accept the doctrine of my hon. Friend the Member for Westhoughton (Mr. Rhys Davies) that we have to be realists and must allow these independent traders to be swept away by the pressure of the Co-operative Movement. I am all for the Co-operative Movement, I think it is a good Mea, but we do not want to have them as the one sole means of distribution. [Interruption.] That is the inevitable corollary of the argument which the hon. Member was putting forward.
§ Sir P. Harris
But we do not want to accept that as an inevitable movement. Nearly all the big successful business men of the day started with small businesses; even the great Woolworth started as a very small firm; and we must see that the small man has a decent chance. Some very practicable proposals are put forward in this Report. I know that they may be criticised and that they may work out roughly, but I say to the President of the Board of Trade that some scheme is better than nothing at all. The insurance idea has been accepted as part of our social system. We have it for unemployment and for health, and it does not seem un- 275 reasonable to apply the same principle in dealing with this problem. I do not think that in the circumstances of the case it is fair to put the whole burden upon the trade. After all, the conditions with which we are dealing have arisen out of action by the State; they are due to the war, to the limitation of supplies and other factors; and I think that if trade is asked to make a contribution to compensate those who have gone out of business the State should be a partner in the scheme and make its contribution on, say, a 50–50 basis. I believe that if that principle were recognised much of the opposition to the insurance principle would go by the board.
I say to my hon. Friend who opened the Debate from the Opposition Front Bench that it would be a great pity if the Co-operative Movement should try to get out of the obligation of bearing their fair share. After all, theirs is a popular movement, a movement that depends for its prosperity, its success and, indeed, its existence upon the working classes. It is essentially an organisation of little men, and it would be a tragedy if it were to be said that though it is a popular movement it is selfish and narrow in its outlook, and that though a good case had been made out for traders who survive to make a contribution to those who suffer as a result of the war it tried to get out of contributing its share. That attitude would do it a great deal of harm and would be unworthy of a great movement for which I, and I think most people, have great admiration. All I would say to the President of the Board of Trade and to his Department is, "Do not let this thing wait." This is a critical moment. It is the time for action. If after the Recess, and as a result of this Debate, the right hon. Gentleman has made up his mind and presents a practical scheme based on the principles in these recommendations, I believe he will have a smooth passage for his legislation.
Mr. Robertson (Streatham)
On a point of Order. In accordance with what is, I believe, the procedure of this House, I raised in a small Committee this week the question of suspending the Rule to-day, having regard to the fact that there would be so many Members who would want 276 to speak in this Debate. It was raised by members of that small Committee at the largest Committee in the House yesterday, and they agreed to approach the usual channels, and a Motion appeared on the Order Paper to-day to that effect. Can you advise me, Colonel Clifton Brown, why that Motion for the suspension of the Rule has not been put into effect?
§ The Deputy-Chairman
There is no Motion on the Order Paper for the suspension of the Rule as to the Sittings of the House. The question of suspending the Rule is not a point of Order for me. I know nothing about what has been done.
§ Viscountess Astor
May I appeal to the Government? Some of us represent thousands of traders in this country and are very much interested in this matter. I have travelled all night from Plymouth, after doing a week's hard work, in order to make a five minutes' speech on this subject.
§ The Deputy-Chairman
I called the Parliamentary Secretary because I thought it would be more important for the Committee to hear the reply from the Government than to hear further speeches.
§ Viscountess Astor
I think it is very important that they should hear the speeches, because they will have to make up their minds on what shall be done after hearing the views of this Committee. It is not as if the Government had a policy. They have been waiting to hear what we had to say, and I think it is vitally important that they should hear us.
§ The Parliamentary Secretary to the Board of Trade (Captain Waterhouse)
I am sorry to stand between hon. Members who, I know, are anxious to speak and the opportunity which this Debate affords them. On the other hand, many questions have been asked, and I do not think I am asking for an unreasonable amount of time in taking some 25 or 26 minutes to deal with the various points that have been put.
§ Viscountess Astor
And to think that I prayed for the hon. Member to get well. 277 The Government have to make up their minds, and I do not think that after what has been said to-day the Government can make up their minds on whether or not to implement the Report. Could we not have another day for a continuation of the Debate? We do not want the Government to bring in a Measure until they do know what are the views of Parliament.
§ Captain Waterhouse
I owe the Noble Lady a special apology and I hope I may receive her special prayers in my turn. This Debate has shown how difficult is the task before my right hon. Friend in taking a decision on this subject. This was clearly set out in the speeches of the hon. Member for South-West Bethnal Green (Sir P. Harris) and the hon. Member for Westhoughton (Mr. Rhys Davies). One said, "Hurry up and put it into operation," and the other said, "Let us not have it at all." It is interesting to note how this Debate has, happily, cut right across all old party divisions. Here is the hon. Member for Westhoughton, a staunch Socialist and believer in State interference, advocating laisser faire and saying, "Let us do nothing at all. We have got on very well for three years. Why not just try it out for the rest of the war?" My right hon. Friend the Member for South-West Bethnal Green, like me a staunch individualist who hates State interference, has been saying, "Let the State take a hand and see what it can do for the small traders." My right hon. Friend deserves the sympathy of the House and the prayers of the Noble Lady when his turn comes for her intercession.
I should like to deal in some detail with the points that have been raised. The hon. Member for East Wolverhampton (Mr. Mander) asked about the basis of compensation in concentration schemes. There is no static basis. The schemes have been worked out in agreement with the trade, as far as we could and, as a general rule, we lay down that when an arrangement is made between the nucleus firm and firms which are to be shut down, 278 the nucleus firm should not increase its profit until the absorbed firms have been able to make up their loss. That does not work in every case, but, by and large, that is the principle in that form of compensation. Then there is the other form of compensation by a levy over the whole trade. It is generally based on a payment sufficient to keep the material and the building in a proper state to operate after the war. It was suggested that the selling organisations of concentrated firms should be kept in being. That clearly is our object. It was one of the main reasons which persuaded my right hon. Friend who is now Minister of Production to introduce this scheme that he wanted to keep these firms alive. He did not want them to go bankrupt owing to the general shortage of labour and materials, but that after the war they should take their places in what we hope will be a time of prosperity. It was also suggested that the local price regulation committees should work out schemes of concentration for the retail trade. I do not know whether the hon. Member who suggested that had many friends on those price regulation committees, but I do not think he will have any to-morrow when they read that suggestion. If any such suggestion were made to those committees they would reply that it would put on them a burden which they were quite incapable of carrying in addition to their other tremendous tasks.
The speech of the hon. Member for South East Ham (Mr. Barnes) was made, naturally and properly, from the angle of the great co-operative movement. The hon. Member thought very little indeed of this scheme. The co-operative movement has not felt the pinch quite as much as some other traders. The figures published in the Report make that clear. The hon. Member asks therefore: "Why should we, with a prosperous movement able to carry our own sick, also contribute to the sick of other and less prosperous branches of the retail trade? "Really, although that is a possible line of thought, I do not think it is one that the hon. Member would carry very far. If my right hon. Friend decides to adopt the Report, I believe that the co-operative movement would loyally fall into line with its suggestions. The hon. Member was not over-complimentary about our progress with utility goods. I was very relieved to find that the hon. Member for 279 Dartford (Mrs. Adamson) batted out so strongly in the other direction that she scored, if I may say so, a good many more runs than the hon. Member. If one considers the magnitude of our task, it will be seen that we have had a very remarkable achievement in the production of utility clothes. It is impossible merely to wave a wand and hope that the intricate set-up of an industry can start producing new and modified lines. The whole essence of British industry is to produce a large variety of goods, and it is not easy for it to be canalised into a narrow channel. I therefore hope that the hon. Member will not feel that we have done too badly in this type of production.
§ Captain Waterhouse
We are getting a move on so fast that my hon. Friend could buy a utility suit to-morrow if he took a little trouble to find the right man to go to and if he had the coupons, as I am sure he has.
§ Captain Waterhouse
Because I am sure that my hon. Friend is one of those who wisely plan their sartorial arrangements. He complained about the publishing of our decisions before we were able to implement them. That point has worried and annoyed a good many people in this House, and not the least my hon. Friend the Member for Evesham (Mr. De la Bère), who is not here at the moment. It is difficult for a Government Department to decide at what point to make their declaration. If they wait until the whole thing is finished, it is certain that there will be leakages. When we discuss matters with the traders, the traders have a perfect right to discuss what they have said with other people. Then you get garbled stories put about which do not do any good to the Department, or to the policy which it is proposed to put into effect. Therefore, in each case it is necessary to take a decision as to the exact point at which an announcement should be made, and, by and large, I do not think that we have failed much in our judgment on that.
I should like to congratulate the hon. Member for Putney (Mr. Linstead) on a most remarkably good and clear maiden 280 speech. He was speaking with an intimate knowledge of one section of industry, and on the other hand he balanced his views in a way which is bound to call forth the respect of the Committee as a whole. He put forward several interesting suggestions, some practicable, others not quite so practicable. One was that we should have fixed prices instead of ceiling prices, but I assure him that that would not by any means always help the class of trader which he had in mind. There are not a few cases where the small trader is able to sell at prices which are impossible for the larger trader. He suggested too that there should be a general licensing and a pro rata reduction in retail trade. That would be a very considerable task, and one which may or may not be possible, but I think it would hardly be practicable to work it out at this stage.
My hon. Friend the Member for The Wrekin (Mr. Colegate) raised a point about shops being opened at Donington, and I hope he will send me particulars. I understood him to say that before licences could be given to those shops it was necessary to apply to the local co-operative organisation. I do not know whether my hon. Friend the Member for South-East Ham has any views on that. Possibly my hon. Friend may like to discuss it with him and see exactly how this curious situation arose. I should like again to thank my hon. Friend the Member for Dartford for her extremely able and well-informed speech, and I should like to reassure her in one or two directions. We have now been able to get up the production of perambulators—when I say "we" have done so, the Board of Trade take little credit for these things; we have merely got the trade so to organise themselves that by a special effort they have got a considerable increase, up to 300,000 perambulators a year, which is rather more than one perambulator for the first-born child in every family. It is not very much, it does not leave a very considerable margin, and we are trying to get further increases, but we think that it will help the position.
The hon. Lady also asked about furniture. She hoped that we should get sound furniture of good design at low prices, and complained that she had not yet seen any utility furniture. At that 281 I can hardly be surprised, because the committee to consider which furniture should be utility was only set up last week, and I am afraid it will take some little time before the furniture gets through into the shops. She also mentioned the shortage of boots and shoes, and that again is a direction in which we hope there will be an early and material improvement.
My hon. Friend the Member for Frome (Mrs. Tate) dealt well and truly with those who criticised her Report, and I say advisedly "her Report," because I know that no one on the Committee took a more active or useful part in producing that Report than she did. Hon. Members as a whole must be most grateful to her, and to the members of the Committee, for the work they have done and for the information which they have made available to us. I do not propose to argue the question of the Report in any way. In his opening speech my right hon. Friend said that he was here to receive the benefit of the opinion of hon. Members, and the views that have been expressed have shown the great diversity of that opinion. We have had those who said, virtually, that they accept the scheme out of hand; we have had others who said equally clearly, that they did not like the scheme at all. But I should emphasise this point: It is very easy to criticise a scheme, and it is extremely hard to build up one. The Craig Henderson Committee have been in session now for just about 14 months. They have found this problem as difficult as any problem which has faced us on the civilian side of war-time organisation.
§ Vice-Admiral Taylor
I hope that the Government will not pay too much attention to the opposition which has been put forward by the big combines, such as the Co-operative Society who are grinding an axe in that respect, and also that they will bear in mind the principal idea, which is to safeguard the small trader in order that he may continue in business.
§ Captain Waterhouse
I can assure my hon. and gallant Friend that my right hon. Friend will not pay undue attention to one argument or another, and that he will weigh up all the arguments that have been put in this House and that have been put outside the House. [Interruption.] No doubt hon. Members will find-ways, possibly through the usual channels, 282 of conveying their opinions, either to my right hon. Friend direct, or to me. I shall be very glad to pass them on. My hon. Friend the Member for South-East Ham raised one particular question about the levy. He asked if it was to be a business expense. I think my right hon. Friend made that fairly clear in his opening speech. He said he thought that as far as the business expense angle was concerned it would probably be allowed as such in the profit and loss account for tax purposes. [Interruption.] My right hon. Friend is a Member of the Government and I think it can be said that the Government speaks with one indivisible voice on such matters. In so far as this levy might be allowed to effect prices I think he is on much more difficult and dangerous ground, and as the hon. Member for Frome pointed out it is by no means certain that when certain businesses are cut out, the shops that remain will be so far out of pocket as would seem to be the case now. The hon. Member for Putney raised a point about the chemists being left out. These, again, like the cooperatives, are a rather favoured industry. I am fairly sure, too, that if they were faced with the alternative of either standing out of such a scheme should it be decided upon, or of coming in and supporting their confreres, they would, without the slightest doubt, decide to help.
§ Mr. Linstead
Apart from their desire to help they have a responsibility for maintaining a service and keeping pharmacies open as well as closing pharmacies.
§ Captain Waterhouse
I quite appreciate that. Whatever trade we consider, the public must be served. Shops must be kept open. We cannot shut down shops merely from the point of view of the shopkeeper. We have, somehow or other, to keep open the channels through which the consumer gets supplies.
§ Mr. Barnes
Is the hon. and gallant Gentleman able to reply to the point about the Purchase Tax on other utility lines?
§ Captain Waterhouse
That has been considered, and may be considered again, but the case is materially different. The Purchase Tax on clothes is a Purchase Tax on an essential—something which no one can do without. Many of these other utility lines are not essentials in the same 283 way. For example, I never go out without an umbrella: I should feel extremely uncomfortable if I had to; but an umbrella is not essential. May I now make a few general remarks? It is often said, both in this House and in the country, that persons have suffered in this war more than property: that the Government have conscripted life, and have not conscripted wealth.
§ Captain Waterhouse
My hon. Friend says, "Hear, hear." Let us examine the truth of that view. The rights of property have been virtually suspended for the period of this war. Any man may have his business establishment or his factory requisitioned. In the last two years nearly 9,000 premises have been requisitioned, 90,000,000 square feet have been taken over on the authorisation of the Factory and Storage Control. The result is that the work of probably hundreds of thousands of men has been saved in building munition and other factories, but the burden on the owners of those factories and on those who work in those factories has been tremendous. These factories are economic and social units. Their destruction causes pain and dislocation, not only to those immediately in them, but to the whole neighbourhood about them. I cannot praise too highly the spirit in which these real industrial tragedies have been borne by the vast Majority of those upon whom they have descended; and, not least, the small shopkeepers—indeed, shopkeepers as a whole—deserve a word of praise. That they are a real social asset we all agree. That they have had, are having, and, I am afraid, will have in future, a very raw deal, and that they will go through a very difficult time, we must all admit. But it is the policy of my right hon. Friend and of the Government to see that nothing unfair is done to them, to see that the scales are held evenly. It is not the policy of my right hon. Friend and the Government to try to alter the structure of trade during the war, to use the conditions of the war to affect the structure of trade. It is rather their policy to do what they can to ensure that when this war is over, those who have done their best for their country during the war shall have their chance of entering upon a period of prosperity, in substantially the 284 same sphere as that which they were in when we entered the war.
§ Vice-Admiral Taylor (Paddington, South)
I would like to ask the Government to set up a special committee to go into the question of the distribution of those goods which are available. That is a very important factor in this question of trade. A quota system may be possible for one article, and quite impossible for another. I would urge all those concerned, especially the small traders, to accept this scheme. Every week that passes brings greater difficulties to the small trader. It is the very small men who are being so hard hit. It is those people whom it is our duty to maintain in business during the war, if we can do so. They should have the right to continue their businesses after the war. Many of those people have put their whole savings into their businesses, in which they have exercised their individuality in their desire to stand upon their own feet and not be a burden on the community. Many of them are unfit for any other work. They have been the backbone of this country and they are responsible for 50 per cent. of the trade of the country. That is a matter which I commend to the consideration of my hon. and gallant Friend.
§ It being the hour appointed for the interruption of Business, The CHAIRMAN left the Chair to make his Report to the House.
§ Committee report Progress; to sit again upon the next Sitting Day.